Wealth and health care asunder

People are growing more vocal in their complaints about the national health care system. According to a recent report by the JoongAng Ilbo, 1.1 million retirees over the age of 55 are required to pay for insurance coverage even though they have no current earnings. This number doubles when family members that rank as dependents are factored in.

Under Korea’s decades-old rate system, subscribers are charged based on the size of their families and the value of their property and automobile assets. This means that a retiree with a house and an old car pays more for health care than when they were employed (in Korea, companies are compelled to subsidize their employees’ national health insurance).

The current system of double taxation dates back to 1977, with employees and employers being charged according to their salary, and other subscribers according to the value of their total income and assets.

When Korea introduced a universal health insurance program in 1988, authorities only received tax data from 45 percent of individual subscribers as many were unwilling to comply. Due to the difficulty of deciphering people’s exact incomes, the authorities levied rates based on general estimates. At the time, the system was considered fair. But over the years, doctors, lawyers, property renters and large restaurant owners have begun registering themselves as employers to lessen their insurance contributions.

Moreover, cars have become indispensable in modern Korean society, so it seems unreasonable to take this as an indicator of wealth and use it as an eligibility criteria for higher insurance rates. Homeowners who do not rent out their properties should also be exempt from the higher rates.

The system therefore cries for an urgent makeover as there are many better ways to calculate the rates, such as by taking into account people’s credit card spending. The rates that employees pay also need to be examined, as subscribers who lack jobs seem to be discriminated against under the present rates. Instead, employers’ contributions should be calculated not just on their monthly salaries, but also by factoring in other sources of income such as interest-rate profits and money made from renting out properties.

Equality should lay at the heart of the health insurance system, and the nation’s health and tax authorities should conduct joint fact-finding studies to clarify just how much money the self-employed are making. Reform of the system is needed to make society more transparent.