National health system to stay in red through 2023

The National Health Insurance Service is expected to lose 8.6 trillion won ($7.3 million) by 2023 as “Moon Jae-in Care,” the president’s health policy, expands benefits.

According to a report released Tuesday by the Ministry of Health and Welfare, the national health insurance provider is going to be in the red until 2023, and likely beyond.

The National Health Insurance Service is expected to post a 3.16-trillion-won loss this year, followed by 2.73 trillion won next year and 1.679 trillion won in 2021. The deficits will continue with 1.69 trillion won in 2022 and 0.87 trillion won a year later.

The red ink started last year, when the National Health Insurance Service posted a 3.9-trillion-won net loss after reporting a 368.5-billion-won net profit in 2017.

“Spending is going to increase no matter what because we are expanding the coverage,” said a budget management official at the National Health Insurance Service, who asked not to be named.

“The premium levels will increase as well, but since we are going to be spending more on expanded coverage, it is natural for this to happen over the years.”

Since taking effect in July 2018, “Moon Jae-in Care,” as the president’s health policy has become known, has increased the range of medical treatments covered by national health insurance.

In August 2017, Moon promised to improve national health insurance coverage. Korea’s coverage rate fell far short of the OECD average of 80 percent and Moon planned to raise it from 63.2 percent of treatments in 2016 to 70 percent by the end of 2022.

To reach that goal, the government is going to provide insurance coverage for spinal disorders by next year, musculoskeletal disorders by 2021 and include cardiovascular disorders, Magnetic Resonance Imaging (MRI) tests and ultrasound tests by 2022.

To pay for that, the Ministry of Health and Welfare said it will work to increase premium levels. Korea’s premium rate of 6.1 percent of monthly income is markedly lower than 10 percent for Japan and 14.6 percent in Germany.

The ministry will also plug financial “leaks” - or inefficiencies - by closely monitoring illegal use of the national health insurance system by Korean nationals living overseas and foreigners who don’t qualify.

The plan is followed by the government’s announcement last week that starting next month it will deny visa extensions for foreigners if they don’t pay health insurance premiums and obligate Koreans living overseas to pay for state health insurance if they do not have their own health insurance in the countries where they reside.

A new rule came into effect the same day that would require all foreigners staying in Korea for six months or longer to sign up for its health insurance program. The measure was implemented in an aim to prevent them from receiving medical treatment and leaving the country without paying insurance fees.

Despite expected losses until 2023, the ministry vowed to keep the National Health Insurance Service in a viable financial state, as it will continue to hold at least 10 trillion won in accumulated premiums from earlier years.

The central government is also offering support to the National Health Insurance Service, as it is supplying the state-run insurance agency with up to 1.2 trillion won by 2022.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]