[1mm Financial Talk] Why Doctors Oppose Simplifying Claims for Silson Insurance...

[Asia Economy Reporter Changhwan Lee] The conflict over simplifying the claims process for indemnity health insurance (실손보험, Silson Insurance), which has been ongoing for over 10 years, is flaring up again. While the National Assembly is pushing for legislation to simplify the claims process for the convenience of the public, the strong opposition from doctors makes the actual passage of the bill uncertain.

According to the industry on the 3rd, the Korean Medical Association (KMA) formed a "Task Force (TF) for Responding to Simplification of Indemnity Insurance Claims" in late last month to block amendments to the Insurance Business Act related to simplifying indemnity insurance claims. As the National Assembly's leadership negotiations were recently settled and moves to promote legislation for simplifying indemnity insurance claims appeared, the KMA formed the TF to oppose the related legislation.

Indemnity insurance has been criticized for its inefficient and complicated claims procedures, and the National Assembly is trying to improve this. To claim indemnity insurance benefits from insurers, patients must visit the hospital where they received treatment to obtain various documents such as receipts, detailed medical bills, and doctors' opinions in paper form, then send them to the insurer via fax or mobile, or visit in person. The process is complicated and time-consuming, causing many to give up claiming insurance for small medical expenses altogether.

According to a survey conducted last year by consumer organizations such as the Financial Consumers Federation and the Green Consumer Network targeting 1,000 indemnity insurance subscribers, 47.2% of respondents had given up claiming indemnity insurance benefits within the past two years despite being eligible. They cited reasons such as the medical fees being small (51.3%) and not having prepared the documents to submit to the insurer on the day of treatment and lacking time to revisit the hospital (46.6%). Only 36.3% responded that the current indemnity insurance claims process was convenient.

The Anti-Corruption and Civil Rights Commission already recommended in 2009 that the indemnity insurance claims process was complicated and needed simplification. The National Assembly is promoting legislation to simplify indemnity insurance claims, focusing on hospitals equipped with electronic systems transmitting related documents online to insurers via the Health Insurance Review & Assessment Service or other agencies upon patient request, thereby reducing patient inconvenience. However, opposition from the medical community has prevented progress for 14 years.

In the 21st National Assembly, six related amendments to the Insurance Business Act were proposed, but they remain pending in the Legislation and Judiciary Committee's subcommittee due to strong opposition from medical and health organizations, including the KMA.

The KMA opposes simplifying the indemnity insurance claims process for various reasons. First, indemnity insurance is a private contract between private insurers and patients, so why should hospitals act as intermediaries to deliver documents to insurers on behalf of patients? Hospitals would need to invest in electronic systems and possibly hire additional staff, raising concerns about cost burdens. It is also pointed out that small-scale hospitals may find it difficult to establish such systems.

There are also concerns about the leakage of sensitive personal information such as hospital medical records. There is a risk that patient medical information could be leaked to insurance companies, which might selectively market insurance products to those patients later. Lee Jung-geun, the KMA's full-time vice president, emphasized, "The fact that five health and medical organizations unanimously oppose this indicates the seriousness of the issue, and it is not appropriate to unilaterally push this forward solely for the benefit of insurance companies."

Critics argue that doctors' opposition is motivated more by their own interests than by public convenience. The Korea Consumer Organization Federation claims that behind the medical community's opposition is a fundamental rejection of computerization because if computerized, the Health Insurance Review & Assessment Service would also know non-reimbursable information unknown to anyone, and insurers would accumulate data exposing hospital treatment costs related to fraudulent or excessive claims.

A representative from the Financial Consumers Federation said, "The KMA claims that simplifying indemnity insurance claims is a trick to fatten insurers' profits and is fiercely opposing amendments to the Insurance Business Act. However, the essence of simplifying indemnity health insurance claims is to provide evidence documents, previously given on paper, electronically upon patient request, thereby enhancing consumer convenience."

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