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Expanding care cost coverage raises questions about long-term funding

Published: 15 Oct. 2025, 00:04

Kim Sang-ho

The author is a professor at the Gwangju Institute of Science and Technology and former president of the Korea Institute for Health and Social Affairs.

The Ministry of Health and Welfare recently held a public hearing on the reform of long-term care hospitals and the plan to include care services under insurance, announcing that the cost of caregiving at long-term care hospitals — currently excluded from national insurance — will become eligible for coverage starting in the second half of 2026.

The policy aims to address the social crisis often referred to as “caregiving hell,” “caregiving bankruptcy” and even “caregiving-related homicide.” It also seeks to resolve a structural problem: Long-term care hospitals, originally designed for medical treatment, have increasingly served as de facto nursing homes for patients with no family caregivers or housing alternatives.

Nurses take care of patients at Seoul National University Bundang Hospital in Gyeonggi on Dec. 8, 2023. [JOONGANG PHOTO]

Under the plan, the ministry will select hospitals with strong medical capabilities to reduce the financial burden on patients requiring intensive care and daily assistance. Of the 215,000 patients currently admitted to 1,391 long-term care hospitals nationwide, about 80,000 are classified as high-need patients. The government plans to begin with 200 designated “treatment-centered long-term care hospitals” (translated), which cover 40,000 patients, and expand the program to 500 hospitals by 2030, creating 100,000 beds.

Selection criteria include facilities where patients with severe conditions, such as dementia or Parkinson’s disease, account for at least 40 percent of admissions; quality caregiving is provided; and unnecessary noninsured services are limited. The copayment ratio will be set at roughly 30 percent, meaning patients will pay around 600,000 to 800,000 won per month. The ministry also plans to improve service quality by changing the current system — where one caregiver looks after more than six patients for five consecutive 24-hour shifts — to a model in which one caregiver handles four patients on three 24-hour shifts. A new payment category will also be introduced for nurses who supervise and train caregiving staff.

While the move to shift caregiving costs from individuals to society represents an important step in socializing the burden of essential care, it faces major challenges.

The first is manpower. Korea already suffers from a shortage of caregivers, a problem exacerbated by declining birth rates and an aging population. Even with the participation of overseas Koreans, the supply is far below demand. The new system, by requiring more staff per patient, could worsen the shortage.

To address this, the ministry will launch a pilot program next year to train foreign care workers and has selected 20 vocational colleges and four universities as official training institutions. The decision to open this pathway is a step in the right direction, but it will take several years before newly trained workers can enter the field. Given the severity of the shortage, additional short-term measures are needed.

The second challenge lies in securing stable funding. The ministry estimates the policy will require 6.5 trillion won from the National Health Insurance Fund by 2030. The fund ran deficits between 2018 and 2020 but briefly returned to surplus in 2021 and 2022 as medical use dropped during the Covid-19 pandemic. As of late 2024, reserves reached 30 trillion won. Yet the National Assembly Budget Office projects a sharp reversal: The fund is expected to fall back into deficit this year, with the shortfall widening until reserves are exhausted by 2028. By 2030, the annual deficit could reach 14.8 trillion won and cumulative shortfalls 26 trillion won. Considering that caregiving coverage alone will cost 2.2 trillion won that year, the pressure on the fund will be severe. Stable and predictable funding mechanisms are therefore essential to sustain the program.

An intensive care unit at a major hospital. [JOONGANG PHOTO]

A third challenge is integration with existing care systems, including the comprehensive nursing care service and the forthcoming community-based integrated care initiative. Korea’s integrated nursing service, introduced a decade ago, was modeled after systems in advanced economies where family caregivers do not stay in hospitals, and nurses and assistants provide full-time care. However, it remains limited mainly to patients with mild conditions. The new integrated community care program, set to begin nationwide in March 2026, aims to shift the paradigm from institutional to community-based care. Ensuring that discharged patients from long-term care hospitals can transition smoothly into local care systems will require meticulous coordination.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.