[Column] Authorities, Medical and Insurance Sectors Must Wage War on Non-Covered Services

[Asia Economy Reporter Oh Hyung-gil] Japan, the world's most advanced super-aged society, is recently revising its elderly medical expense policies. Starting next year, it is promoting a plan to double the out-of-pocket medical expense rate for elderly people aged 75 and over with an annual income exceeding 2 million yen, from the current 10% to 20%.

As the Dankai generation (born 1947?1949) enters the elderly category, a sharp increase in medical expenses is inevitable. While requiring elderly patients who frequently use hospitals to pay more out of pocket may be socially harsh, there is a strong sense of responsibility to reduce the economic burden passed on to the next generation accordingly.

The situation in our country is similar. Last year, the National Health Insurance's financial deficit surged 15.9 times compared to the previous year, triggering a 'red light' on sustainability. Nearly 8 trillion won in government subsidies was used last year alone to cover the deficit. The actual condition of the indemnity health insurance, called the 'second health insurance,' is even more serious. The loss ratio reaches 130%, caused by excessive medical care and overbilling.

The top 10% of indemnity insurance users accounted for 56.8% of the total insurance payouts. As insurance payouts increased, premium hikes for subscribers were repeated annually. Eventually, a '4th generation indemnity insurance' was introduced, which raises out-of-pocket costs and applies premium surcharges or discounts based on medical usage.

However, concerns have arisen that the new indemnity insurance may further fuel the loss ratio increase of existing indemnity insurance. If subscribers with low medical usage switch to cheaper insurance plans, only high-usage subscribers will remain in the existing plans, causing the loss ratio to rise rapidly and threatening the insurance's sustainability.

In the market, there are also calls for stronger non-covered service management by health authorities. If excessive medical practices are not controlled, the effect of blocking premium increases will inevitably fade.

According to the National Health Insurance Service, most medical institutions generate profits from non-covered items, while for covered items with fixed prices, they increase the volume of treatments and raise prices for non-covered services to generate profits.

Accordingly, health authorities have decided to introduce measures to strengthen non-covered service management from next year, including the disclosure of non-covered medical costs. The plan is to expand the disclosure of non-covered medical costs, which previously applied to hospital-level institutions and above, to clinics, and to increase the number of disclosed items. Attention is also focused on the comprehensive non-covered service management plan to be announced by the Ministry of Health and Welfare on the 31st.

Non-covered medical services, which refer to medical treatments not covered by health insurance, are essential for applying new medical technologies and guaranteeing consumers' choice. However, they must not become tools for profit generation. It is time for the medical community and insurance industry to jointly participate in managing non-covered services.

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