Medical insurance overhaulAuthorities plan on overhauling the national health care insurance program, which has long been criticized for being unfair. The reforms are designed to target wealthy people who have been paying low insurance premiums in proportion to their earnings.
According to the outline submitted by the Ministry of Health and Welfare, the government plans to incorporate gains on dividends, interest, rent and business profit into the way it calculates these premiums in the future.
This would be the first time a change has been made to the national health insurance system since 1977, when blanket premiums were levied on employer-sponsored subscribers who are taxed only on their work income.
Once the change is implemented, self-employed high-income earners will no longer be able to pass themselves off as working for a corporation in order to pay less for their medical coverage.
About 1.53 million, or 12 percent of company-sponsored subscribers, report nonsalary income on top of their monthly pay. Many earn huge amounts outside of this but pay the same premiums as other regular salary-earners.
The side effects of the current system received attention when the government in 2003 moved small workplaces of fewer than five employees out of the “regional,” or self-employed, subscription category and into the “company” subscription bracket. As a result, doctors, lawyers and other high-paying professionals switched to the latter, and were only required to make payments based on their salaries.
The move to offer health coverage for employees in small workplaces mainly benefited the rich elite class, in which many people already make considerable money from renting properties and selling stocks, among other forms of revenue.
Many bent the law to report themselves as being sponsored by companies, rather than owning the companies. The government now aims to fix these loopholes.
The new move comes amid a widening deficit in the national health insurance. Last year, national insurance incurred a deficit of more than 1 trillion won ($925 million). This is expected to reach 20 trillion won by 2020.
Taxing stocks and rent revenue is as important as imposing austerity measures to improve the budget, and this is something the rich should see as their duty to society. Extravagant hospital spending should also be reigned in, among other measures.