[Viewpoint] Health reform should shift burdenLife sometimes seems to be an endless progression of problems.
As soon as you’re out of school, you have to worry about jobs and marriage. By the time you feel your life has settled down, you are over 50 and begin to suffer from poor eyesight, degenerative arthritis or other chronic conditions. As you retire, you have to worry about your finances, and if you are unfortunate, you have to contemplate nursing options.
Fortunately, you can enjoy the benefits of a social security system, such as health insurance, a pension and nursing care. However, as people get older, they develop more health problems that require higher medical expenses. And as people live longer, the pension fund is running out. The growing number of senior citizens who need medical and nursing care adds to the social cost for supporting them.
One might think the problem can be fixed simply by raising insurance premiums. But that ignores the simple fact that the younger generation, which must pay the premiums, is shrinking. The percentage of senior citizens over age 65 was 7.2 percent in 2000, but it will grow to 17.7 percent in 2020 and 32.0 percent in 2040. Those aged 20-49 are the most responsible for the cost of social security.
In 2000, seven young Koreans supported one senior citizen, but in 2020, 2.7 young men and women will have to care for each senior citizen. By 2040, every young taxpayer will be supporting a senior citizen.
It doesn’t end there. When a baby born this year turns 30, he will need to pay for the support of a senior citizen. But when he turns 40, he will have to support 1.2 senior citizens. The aging of the society will be an explosive issue for children being born today.
Instead of simply worrying about the grim future, we need develop realistic measures to make sure young Koreans do not suffer from an excessive burden of supporting seniors. While it might not have an immediate effect, the government needs to continuously promote policies to encourage young parents to have more children. Also, the social security system needs structural reform. Most of all, instead of relying solely on insurance premiums, the amount of taxes as a source of revenue should be increased. The premium is mainly paid by the younger generation, while the tax burden can be shared by all citizens. When a certain portion of social security revenue source comes from tax, the burden on the young generation in the future will be eased. If we maintain the existing system of funding, we will be resented as irresponsible ancestors by future generations.
First, the pension system should be changed to a complete accumulation method in which each individual receives what he has reserved. Reforms of medical insurance, which covers medical expenses, and nursing care insurance, which covers nursing costs, are more desperately needed than reforms in the pension system.
Medical expenses of the elderly are truly astronomical. According to a projection for 2020, seniors will consist of 15.7 percent of the entire population, but will account for 43.8 percent of the nation’s medical bills. Senior medical expenses are more explosive than the growing senior population. Moreover, seniors who require costly medical care reside in nursing facilities, ultimately taking advantage of the nursing insurance. Medical and nursing insurance need to be reformed in two ways.
First comes the health insurance system itself. The integration of insurance was promoted to reduce operating costs, but the bureaucratic structure posed various problems in managing the insurance funds. Reform should focus on the decentralization of power within the system to make competition possible in order to manage revenue more efficiently.
Next, projects to improve citizens’ health need to be promoted systematically to prevent and reduce health problems. Many of the health conditions that emerge after age 50 could have been prevented if patients started watching their health around 40.
The operation of local health centers should be expanded to rural regions, and the government needs to concentrate on public health awareness projects to fundamentally prevent illnesses. Systematic management of citizens’ health will help control medical and nursing costs. Unless we hurry these reforms, it might be difficult to guarantee continued operation of pension, medical and nursing insurance.
*The writer is a professor of health administration at Yonsei University. Translation by the JoongAng Daily staff.
by Lee Kyu-sik