"Despite 20 Trillion Won in Taxpayer Money, Health Insurance Coverage Rate Remains Unchanged... Due to Increase in Non-Covered Medical Treatments"

Source: Korea Insurance Research Institute

[Asia Economy Reporter Changhwan Lee] Although the government invested more than 20 trillion won over the past 15 years to strengthen the coverage of the public insurance, National Health Insurance, claims have emerged that the effect was not properly realized due to the increase in non-reimbursable treatments at hospitals and clinics.

According to the Insurance Research Institute's report titled 'Analysis of Non-Reimbursable Insurance Claims in Actual Medical Expense Insurance' on the 15th, as of 2020, the total medical expenses under the domestic health insurance amounted to approximately 102.8 trillion won, of which the patient’s out-of-pocket expenses not covered by health insurance were 35.7 trillion won.

The coverage rate of health insurance in total medical expenses was 65.3%, and the proportion of patient out-of-pocket expenses was 34.7%. This means that if an individual spends 1 million won on medical expenses, about 650,000 won is covered by the government, and the rest is borne by the individual through actual expense insurance or out-of-pocket.

The problem is that despite the government spending about 20 trillion won over the past 15 years to increase reimbursable items and strengthen health insurance finances to enhance coverage, the health insurance coverage rate showed little change, from 64.5% in 2006 to 65.3% in 2020.

Source: Korea Insurance Research Institute

This is analyzed to be due to the excessive increase in non-reimbursable treatments at hospitals and clinics. Although the medical items covered by health insurance have increased, hospitals and clinics have avoided them by increasing non-reimbursable treatments or excessively raising medical costs, preventing the health insurance coverage rate from rising further.

A representative example is the multifocal lens surgery for cataracts, which has recently become a social controversy. As the use of cataract surgery increased and the government made it reimbursable, some ophthalmology hospitals and clinics expanded the non-reimbursable multifocal lens surgery and raised the surgery costs significantly.

Source: Korea Insurance Research Institute

Cataract surgery is the most frequently performed surgery in Korea, and to reduce the patient's treatment burden, the government made the non-reimbursable examination items (anterior segment ultrasound, ocular biometry) of cataract surgery reimbursable in September 2020.

Subsequently, ophthalmology hospitals and clinics began raising the prices of non-reimbursable treatment materials or increasing multifocal lens surgeries. After that, claims for actual medical expense insurance for cataract surgery showed a sharp increase. Besides cataract surgery, non-reimbursable items such as physical therapy, HIFU (High-Intensity Focused Ultrasound), thyroid treatment, and cosmetic injections are cited as factors worsening the actual medical expense insurance finances.

This phenomenon was mainly observed in small and medium-sized clinics rather than general hospitals. While tertiary general hospitals expanded their health insurance coverage rate from 65.1% in 2017 to 70.0% in 2020, clinics saw a decrease from 60.3% in 2017 to 59.6% in 2020.

Source: Korea Insurance Research Institute

The report argued that controlling the demand and supply of inappropriate medical services is important for the efficient operation of health insurance. It analyzed that institutional measures such as guidelines for non-reimbursable medical expenses or fee negotiations with insurers, as seen in advanced countries like Germany, Australia, France, and the United States, are necessary to solve the problem of excessive non-reimbursable medical expenses.

Jung Sunghee, a research fellow at the Insurance Research Institute, stated, "It is necessary to consider establishing a standard fee system for non-reimbursable items based on accumulated statistics of non-reimbursable treatments, with criteria such as ceiling price, average price, purchase cost, and negotiated price according to the characteristics of non-reimbursable items."

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