Insurance bills to be cut by half for low-earners

The Ministry of Health and Welfare announced on Monday the details of an amendment to the national health insurance, which will reduce the insurance bills by some 50 percent or more for low-income households, increase the bill for households with more than 34 million won ($29,151) in annual income separate to employment paychecks and include dependents as subscribers to the insurance system.

The Health Ministry announced the details to the amendment of the payment system of the National Health Insurance Service for the first time in two years during a National Assembly meeting on Monday. The ministry had scrapped its plans to amend the payment system in January of 2015.

The amendment, set to take off from next year if passed, is meant to make the national health care system more affordable for low-income households and to close loopholes whereby the affluent were able to avoid paying their dues by registering as dependents. Foreigners registered to the National Health Insurance Service will also have to pay differently according to the amendment.

According to the amendment plan, those who are employee-covered and earn more than 20 million won in annual income will have to pay some 80,000 won to 190,000 won a month for their insurance, regardless of whether they are dependents. According to the Health Ministry, some 590,000 people of this category did not pay for their insurance because they were registered as dependents.

The current system states that those with less than 40 million won in combined annual income and 900 million won in assets can register as dependents and receive free health insurance.

According to the current health insurance system, a retired public official who receives 34.1 million won a year in pension and lives in a 700 million won apartment does not have to pay a dime for the national health insurance.

If the amendment comes into effect next year, the retired public official will have to pay 213,000 won monthly, which is broken down into 91,000 won calculated based on the pension and an additional 122,000 won calculated based on the assets.

The amendment specifies also that those who are employee-covered but run a separate business on their own, like a chicken-and-beer restaurant, and earn more than 34 million won in combined annual income from next year must pay additional fees in their national health insurance. According to the Health Ministry, some 260,000 households will altogether pay some 360 billion won more annually with the amendment.

On the other hand, those who are self-employed and earn less than 1 million won in combined annual savings will only have to pay 13,100 won a month next year, which is some 50 percent or more drop from what they pay now. In 2024, some 6 million households with less than 3.36 million won in annual savings will have to pay just 17,120 won for their insurance.

The amendment will be implemented in three stages, from early next year, in 2021 and in 2024. Given that opposition parties have drafted their own plans for the amendment, its specifics may be altered before it is passed at the National Assembly.

BY SHIN SUNG-SIK, ESTHER CHUNG [chung.juhee@joongang.co.kr]