Next Year’s Health Insurance Premium Rate Rises 1.49%... Office Workers Pay an Average of 2,069 Won More per Month (Comprehensive)

Employee Health Insurance Premium Rate Hits First 7% Range
Regional Subscribers Face Additional 1,598 Won Monthly Burden

[Asia Economy Reporter Jo In-kyung] The health insurance premium rate will increase by 1.49% next year compared to this year. Employees will have to pay more than 7% of their income as health insurance premiums.

The Ministry of Health and Welfare announced on the 30th that it held the Health Insurance Policy Deliberation Committee, the highest decision-making body for health insurance policy, from 7 p.m. on the 29th and decided to raise the health insurance premium rate for workplace subscribers in 2023 to 7.09%, up 1.49% from this year's 6.99%.

The amount charged per insurance point for regional subscribers, which is levied based on income, property, and automobiles, will also increase from 205.3 won to 208.4 won.

The Health Insurance Policy Deliberation Committee is composed of 25 members, including the Vice Minister of Health and Welfare as the chairperson, and eight members each from subscriber representatives, provider representatives, and public interest representatives. The health insurance premium rate was unanimously decided by consensus on this day.

Accordingly, the average monthly premium burden for workplace subscribers will increase by 2,069 won from 144,643 won as of July this year to 146,712 won next year. Due to the expansion of the non-taxable limit for meal allowances following the revision of the Income Tax Act, the taxable income for workplace subscribers whose non-taxable meal allowances increase will decrease, resulting in a smaller increase in premiums.

The average insurance premium per household for regional subscribers will rise by 1,598 won from the current 105,843 won to 107,441 won next year. However, since the second phase of the health insurance premium charging system reform will be implemented from September, even with a 1.49% increase in the premium rate, the average premium burden is expected to decrease by 20,857 won compared to July this year, to 84,986 won.

Lee Ki-il, Vice Minister of Health and Welfare, explained at the meeting that the background for the increase in the health insurance premium rate was "the full reflection of the impact of the second phase of the health insurance premium charging system reform and the reduction of income subject to premium charges due to the revision of the Income Tax Act, which has decreased the revenue base of health insurance." He added, "Although there was a need for an increase at the usual level due to expenditure requirements for implementing national tasks such as strengthening the essential medical system and expanding medical support for vulnerable groups, the public's capacity to bear premium burdens due to inflation and other factors was prioritized."

Previously, the health insurance premium rate had been increased annually by 2.04% in 2018, 3.49% in 2019, 3.20% in 2020, 2.89% in 2021, and 1.89% in 2022. Accordingly, the premium rate that subscribers had to bear continued to rise from 6.24% to 6.46%, 6.67%, and 6.86%, and last year, the Health Insurance Policy Deliberation Committee suppressed the increase and decided on 6.99%, barely maintaining the 6% range until this year.

The current Health Insurance Act stipulates an upper limit for the premium rate for workplace subscribers at 8% (80 per 1,000) of income. However, with the premium rate surpassing 7% next year, concerns are raised that it may approach the legal ceiling of 8% during President Yoon Seok-yeol's administration. Assuming an average annual increase of around 3% in premiums reflecting the trend of increased medical use and the impact of the second phase of the health insurance premium charging system reform, the legal ceiling of 8% could be reached by 2026.

The government plans to form a Health Insurance Financial Reform Task Force and present financial reform measures after intensive discussions by October. The current health insurance benefits received by the public will be maintained while re-examining items where financial expenditures are expected to surge and managing inappropriate medical use such as excessive medical utilization and health insurance qualification abuse. Additionally, the government aims to prevent financial excess and leakage by improving the system for foreign dependents, ensuring that health insurance finances are used where truly needed. The savings from these measures will be invested in restoring essential medical services and expanding medical security for vulnerable groups.

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