Health plans' merger is postponed

The ruling and opposition parties met halfway on the merger of the finances of the nation's two health insurance plans Friday, agreeing to put it off by one year and six months.

Lee Sang-soo, floor leader of the ruling Millennium Democratic Party and his counterpart, Lee Jae-oh, of the Grand National Party, hammered out the agreement, which pushes back the controversial last phase of the merger for the next administration, in July 2003.

The two health plans are organized along different lines － one in workplaces and the second by regions. The second plan enrolls mostly the self-employed, professionals or low-wage laborers. Finding a standard way to levy insurance premiums on the different policy holders was thwarted by the lack of a reliable way to determine the incomes of those in the regional group.

The Millennium Democrats proposed postponing the merger by one year; the Grand National Party called for a two-year delay. Friday's agreement came when the ruling party suggested splitting the difference. The revision to the National Health Insurance Act heads to the National Assembly floor on Tuesday.

Also agreed upon was a plan to raise the tobacco tax, currently 2 won per pack of cigarettes, to the range of 150 to 200 won next year. The increased revenue would go to stabilizing the finances of the integrated health insurance plans.

An official at the Health and Welfare Ministry said Friday, "We will propose to the National Assembly to raise the tobacco tax to 180 won." The ministry had originally planned to raise it to 150 won, which would raise 660 billion won ($503 million) a year. An increase to 180 won would bring in 810 billion won annually. The government plans to use the revenue to put the health plans in the black by 2006.

Since 1998, the government has poured 100 billion won into reform of the two health insurance plans. In 1998, their administration was merged. In 2000 the roles of doctors and pharmacists in prescribing and dispensing drugs were legally separated. The reform was to have been completed with a merger of finances this year.

by Kim Jung-ha