President Moon Jae-in. (Photo on the courtesy of Cheong Wa Dae website)

The President Moon Jae-in government plans to pour 42 trillion won into expanding the national health insurance coverage over the next five years.

The steps are expected to force the National Health Insurance Service (NHIS) to incur losses worth 9.5 trillion won. But the government has not come up with exact solutions to fix the worsening financial situation. As NHIS’s expenditures are on the rise in the wake of the acceleration of Korea’s aging population, the government’s latest moves are feared to deepen the depletion of NHIS’ finances.

The Ministry of Health and Welfare (MOHW) announced on Aril 10 the first national health insurance master plan, containing mid- and long-term visions, including policy goals of the national health insurance and the direction of action.

The comprehensive plan calls for raising the coverage of national health insurance from the current 63 percent to 70 percent by 2020. To this end, a combined 41.58 trillion won will be plowed for the next five years.

An additional estimated 9.5 trillion won in losses of the national health service in the next five years is 6.456 trillion won more than 2017 when the current government announced the so-called Moon Jae-in Care, designed to ramp up the national health insurance’s coverage.

The snowballing losses are attributed to the full expansion of the medical insurance coverage of non-coverage categories.

From next year, non-coverage categories such as screening for MRIs of the chest, as well as chest/heart ultrasounds will be covered by the national health insurance scheme. Ultrasounds of head/neck and blood vessels will be expanded to benefit from the coverage of the national health insurance.

Two- and three-person rooms and one-person rooms to restricted extent will be covered by the national health insurance starting 2020. By medicines, serious cases suffering from cancers, genetic, and rare diseases will have treatment medicines covered by the medical insurance regime.

The problem is that the national health insurance is facing with the depletion of its finances. The national health insurance’s deposits, now amounting to more than 20 trillion won will be nearly slashed in half to 11.08 trillion won five years later. The deposits are forecast to be dried up seven to eight years later, putting more pressure to raise health insurance premiums.

The National Assembly Budget Office reported in 2017 that the finances of the national health insurance service are predicted to be depleted around 2026 based on the projections related to the strengthening of medical insurance coverage and its finances.

If both the strengthening of medical insurance coverage and fiscal reduction steps are implemented, the deposits of the national insurance service are projected to dwindle to 4.7 trillion won.

At that time, the government said it will implement steps such as the strengthening of post-management of medical coverage, the restriction of light patients’ use of hospitals, management of frequent patients, and the revamping of convalescent hospitals.

A report, acquired by Rep. Kim Myung-yeon of the Liberty Korea Party from the National Assembly Budget Office last October, showed that the finances of the national health insurance are forecast to be depleted by 2027 even though the government raises medical insurance premiums by 3.49 percent annually.

A 3.49 percent surge in medical insurance premiums in 2020 will be the highest in eight years, since 2012 when they jumped to 5.9 percent.

The ministry plans to retain deposits of national health insurance at about 10 trillion won. To this end, the ministry plans to impose new medical insurance premiums for those who earn housing rental incomes and financial incomes of less than 20 million won annually while increasing the legally required government support fund.