Joint Statement from Business Community on 'Health Insurance Premium Rate Freeze'... "Government Must Revise Health Insurance Premium Increase Plan"

Joint Statement by User Organizations of the Health Insurance Policy Deliberation Committee on the 25th

[Asia Economy Reporter Kim Ji-hee] The business community has called for freezing the 2021 health insurance premium rate and completely revising the government's basic plan for premium increases, considering the economic and employment crisis caused by the COVID-19 pandemic.

The user organizations of the Health Insurance Policy Deliberation Committee, including the Korea Employers Federation and the Korea Federation of Small and Medium Business, issued a joint statement on the 25th, saying, "With the prevailing forecast that the global economy will take a considerable time to fully recover to the pre-COVID-19 state, South Korea will also face a difficult phase," and added, "Considering this economic and employment crisis, the government’s basic plan for health insurance premium increases must be completely revised." Previously, the government announced a plan to strengthen coverage and stated that it would raise the health insurance premium rate by about 3.2% annually to achieve this.

These organizations assessed the recent economic situation, stating, "Due to the worst economic and employment crisis caused by the COVID-19 shock, the ability of companies and households to bear social insurance premiums is also at its limit," and noted, "Following the downward revision of the economic growth rate to -3.3% in the second quarter of this year, the Household Trends Survey results for the second quarter released by Statistics Korea on the 20th showed decreases in workers’ income, business income, and property income."

They also pointed out, "Over the past three years (2018-2020), the health insurance premium rate has cumulatively increased by 8.74% due to the implementation of coverage strengthening measures," and added, "Including wage increases, the actual premiums paid by workplace subscribers have increased by 16.71%, so the fact that a high burden of health insurance premiums has already been borne should also be taken into account."

They emphasized, "If only the expansion of health insurance benefits and expenditure demand are considered, the health insurance premium rate would inevitably continue to rise, but currently, the priority should be given to the declining ability of companies and households, who bear the health insurance burden, rather than the beneficiaries or medical providers," and stressed, "Therefore, the health insurance premium rate for next year should be frozen." They also said, "It is appropriate to shift policies toward managing expenditures based on premium rates that companies and households can afford."

Regarding the medium- to long-term soundness of health insurance finances, they explained, "Considering the national burden, premium rate increases should be minimized, and responses should be made through rational expenditure management by adjusting national-level plans for expanding coverage and prioritizing health management demand."

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