[Initial Insight] Health Insurance Finance and National Health

The government has decided to completely revise the previous administration's health insurance policy, which focused on expanding coverage of National Health Insurance (NHI) benefit items. The aim is to readjust excessive NHI expenditures and increase coverage and investment in essential medical care directly related to life. Coverage under NHI for ultrasound and magnetic resonance imaging (MRI), which have been pointed out as the main causes of NHI financial losses, is expected to be reduced soon.

The so-called 'Moon Jae-in Care,' implemented since 2018, aimed to reduce the medical expenses burden on the public. With the goal of creating a "country without worries about hospital bills," it sought to raise the health insurance coverage rate (the proportion of total medical expenses covered by NHI) from the low 60% range to 70% within the administration's term. Accordingly, starting with brain and cerebrovascular MRI in October 2018, coverage was sequentially extended to head and neck, abdominal, chest, whole-body, special disease MRIs, and abdominal and reproductive organ ultrasounds in 2019. Ultrasound medical expenses, which were 137.8 billion won in 2018, increased 9.1 times to 1.2537 trillion won in 2021, and MRI medical expenses surged 11.6 times from 51.3 billion won to 593.9 billion won. As costs decreased due to NHI benefits, both hospitals and patients overused medical services, and uncontrolled side effects such as the emergence of new non-covered items appeared in actual medical settings.

Meanwhile, the NHI financial balance, which had been in surplus for seven consecutive years from 2011 to 2017, turned to a deficit in 2018 and recorded negative balances for three consecutive years. The NHI reserve fund, which exceeded 20 trillion won in 2017, is expected to be depleted by 2025, with tens of trillions of won in deficits accumulating annually. Consequently, the Board of Audit and Inspection began auditing the Ministry of Health and Welfare, the National Health Insurance Service, and the Health Insurance Review and Assessment Service in May last year, increasing calls for reform of Moon Jae-in Care. This year, the last remaining coverage of MRIs for musculoskeletal diseases such as shoulder, knee, and neck is now subject to immediate reconsideration.

On the other hand, some point out that the deterioration of NHI finances is not solely due to the expansion of Moon Jae-in Care. Although government support for NHI financial soundness is legally mandated, the rate of national treasury support has been insufficient every year. Furthermore, the rapid increase in rapid antigen tests (RAT) at local clinics following the spread of COVID-19 has exacerbated financial deterioration.

Although the utilization of ultrasound and MRI has increased by about 10% annually after their phased coverage, some argue that these were necessary medical procedures and that overuse is only partial. There are concerns that if the criteria for NHI coverage are raised again or items are excluded from coverage, patients' out-of-pocket expenses will increase, potentially leading to the abandonment of medical treatment.

If there are loopholes and leakages in the current NHI system, it is appropriate to correct them. However, it has not yet been properly evaluated whether the previous expansion of coverage policies only increased the financial burden on NHI or how much they contributed to public health. If the government easily reverses a system originally created to protect the lives and health of the people as if turning over a hand, it would also be a very irresponsible decision. Korea's health insurance coverage rate was 64.2% as of 2019, still falling short of the OECD average of 80%.

/Biohealth Department Deputy Director ikjo@

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