80 Trillion Won Government Subsidy Over 11 Years... Leaking Health Insurance Finances

Subsidies of 79.9 Trillion Won Injected... 10 Trillion Won in Taxes This Year Alone
Three Consecutive Years of Deficits Due to Rapid Spending Increase Despite Fiscal Support
Government Subsidies Expected to Grow with Annual 14% National Treasury Support of Health Insurance Revenue

[Asia Economy Reporter Jang Sehee] The budget allocated by the government to subsidize the National Health Insurance (NHI) program has nearly doubled over the past decade. Since the subsidy amount is determined proportionally based on the increase in NHI premium revenue, the budget input has also increased accordingly as income rose. Since last year, the annual support amount has exceeded 9 trillion won. Despite budget support, the NHI financial balance has turned to a deficit since 2018. Considering that the government is responsible for the health of the people, subsidies cannot be stopped, but there are calls to flexibly adjust the support amount and carefully review unnecessary expenditures.

According to the Ministry of Economy and Finance and the Ministry of Health and Welfare on the 28th, the total budget the government has invested in NHI premiums over 11 years since 2011 reached 79.7 trillion won. In 2011, when the NHI surplus began, 5.0361 trillion won was invested, and this year it increased to 9.5 trillion won, nearly doubling. In 2019 and last year, 7.7803 trillion won and 9.2283 trillion won were supported, respectively.

The annual increase in government support is due to the provision in the National Health Insurance Act that mandates a 14% contribution from the national treasury to NHI revenue. According to this fixed-rate support method, if NHI-related income increases, the support amount naturally increases.

Although a sunset clause is specified in the supplementary provisions, extensions have been repeatedly made without much consideration. Since the start of national treasury subsidies in 2006, the National Assembly has extended them four times to date. A government official stated, "Once subsidies are provided, it is difficult to stop them," adding, "Since the ratio is required to be at least the current level, it is difficult to adjust."

The problem lies in sustainability. Although subsidies have been provided through budget input, NHI deficits have appeared for three consecutive years. Considering the national fiscal situation, providing universal medical services to all citizens through budget support inevitably faces limitations. National debt has surged to 965.9 trillion won based on this year's supplementary budget.

As government debt increased significantly during the COVID-19 response, the government intends to overhaul the entire national subsidy system. Hong Nam-ki, Acting Prime Minister and Deputy Prime Minister for Economy, held a press briefing at the Government Sejong Complex yesterday and emphasized, "This time, structural reform is necessary." He said, "There are budgets allocated out of inertia," and added, "We need to review subsidies, which once entrenched are hard to remove, from a zero-based perspective."

Experts have also called for fundamental solutions to stabilize the fund, considering future demographic structures and fiscal conditions. Hong Woo-hyung, Professor of Economics at Hansung University, said, "If only finances continue to be poured in, we will face fiscal limits," and added, "To maintain the current level of the medical system in a low birthrate and aging society, structural reform of the NHI premium finances is necessary."

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