Increase in Actual Loss Insurance Claims Despite COVID-19 and Moon Jae-in Care... "Rise in Non-Reimbursable Expenses"

[Asia Economy Reporter Oh Hyung-gil] Since the implementation of strengthened health insurance coverage, known as 'Moon Jae-in Care,' the loss ratio of indemnity health insurance has been continuously increasing.

At general hospitals, claims for indemnity insurance decreased due to the novel coronavirus disease (COVID-19), resulting in a reduction in non-reimbursable treatments under health insurance. However, clinics saw a clear increase in indemnity claims and non-reimbursable treatments.

There are calls for solutions to manage non-reimbursable treatments in order to enhance the effectiveness of Moon Jae-in Care.

According to the insurance industry on the 2nd, the loss ratio for indemnity insurance in the first half of the year was 131.7%, slightly down from 138.3% in the second half of last year.

However, compared to 129.1% during the same period last year, it increased by 2.6 percentage points.

In particular, risk losses of 1.4 trillion KRW occurred in the first half alone, matching the losses incurred throughout 2017 (1.4 trillion KRW).

According to the Korea Insurance Research Institute, medical expenses claimed under indemnity insurance in the first half decreased compared to the second half of last year, but the amount claimed increased.

The number of claimants decreased by 1.2% compared to the second half of 2019, but both insured co-payments and non-reimbursable expenses increased by 4.2% and 2.4%, respectively, compared to the second half of 2019. This means fewer people are claiming indemnity insurance, but the amounts claimed are increasing.

[Image source=Yonhap News]

In particular, indemnity insurance claim cases varied depending on the medical institution.

At tertiary general hospitals, the number of indemnity insurance claimants and non-reimbursable treatments decreased by 6.9% and 3.3%, respectively, compared to the second half of last year, whereas clinics saw increases of 3.0% and 8.4%, respectively.

The institute pointed out that while items closely related to the strengthened health insurance coverage policy show a decreasing trend, increases continue mainly in items vulnerable to overmedicalization.

For inpatient care, fees such as hospitalization fees and MRI/ultrasound diagnostic fees have slowed or decreased due to coverage, but non-reimbursable items such as treatment materials, procedures and surgery fees, injection fees, and rehabilitation and physical therapy fees still show a high growth rate.

Jung Sung-hee, a research fellow at the Korea Insurance Research Institute, said, "For the indemnity insurance system to be sustainable, it is necessary to balance demand and supply through regulation and market principles," adding, "Instead of regulating to create blind spots in demand, it is necessary to leave premium adjustments to market principles so that supply is not contracted."

This content was produced with the assistance of AI translation services.