[EDITORIAL] A Plan for Sound Medical Insurance

We can no longer turn a blind eye to the fact that health insurance finances are dwindling fast. The accumulated reserves for workplace health insurance decreased from 2.6 trillion won ($2.03 billion) in 1996 to 840 billion won in December 2000, and now it has fallen to 300 billion won. If this trend continues, the reserves will be depleted by May. Also, local health insurance reserves collected from individuals not covered by the workplace system were exhausted at the end of last year, and during this year alone a total of 620 billion won in emergency funds was injected into the system.

Since the introduction of medical reform last July, health care expenditures have out paced revenue, but the government raised payments to doctors as many as three times to settle doctor strikes. From November 1999 to January 2001, payments to doctors rose 41.5 percent. The government did not prepare proper measures, though increase use of expensive medications was foreseen.

Reportedly the government and the ruling party are examining several plans, such as taking out short-term loans from financial institutions, pouring the entire sum of this year's remaining subsidies (1.21 trillion won) into the local insurance system or lending some of the money to workplace health insurance. They are also studying a 20-percent hike in workplace and local insurance premiums in July. Some people have even suggested that the national pension funds be drawn on to meet the emergency. These stopgap measures, however, can never be a fundamental solution.

It is urgent to prepare a mechanism to block questionable and excessive insurance claims by doctors and pharmacists. Since introduction of medical reforms, the percent of fraud cases actually investigated has dropped to only 0.7 percent of all those reported. If it were raised to around 3 percent, the level of other industrialized nations, hundreds of billions of won a year in expenditures may be saved. Together with self-rescue efforts, such as restructuring the National Health Insurance Corporation, it is necessary to come up with a plan to boost premium collection for the local insurance system. If the implementation of these mechanisms and rescue efforts still produces deficits, across-the-board premium hikes may be considered.