[2022 National Audit] This Year Is the Last for Health Insurance National Treasury Support... Calls to Abolish the Sunset Clause at the Audit

[Image source=Yonhap News]

[Asia Economy Reporter Kim Young-won] There have been urgent calls for legislative amendments regarding the National Health Insurance, whose government funding is set to end this year. In addition to abolishing the sunset clause, there are also demands to increase the ratio of government funding relative to insurance premium revenue, which is currently lower than that of overseas countries.

At the National Assembly Health and Welfare Committee’s audit held on the 13th at the National Health Insurance Service headquarters in Wonju, Gangwon Province, lawmakers emphasized the necessity of abolishing the sunset clause for health insurance. Currently, health insurance premiums receive 20% of the expected revenue from the national treasury. According to the National Health Insurance Act, 14% of the expected insurance premium revenue for the year is supported from the general account, and according to the Health Promotion Act, 6% is supported from the health promotion fund borne by tobacco businesses. However, these legal provisions are subject to a sunset clause, meaning they automatically lose effect after a certain period. If the law is not amended by the end of December this year, government funding for health insurance premiums will disappear.

On this day, Kim Won-i, a member of the Democratic Party of Korea, argued for extending government funding based on the increase in elderly medical expenses due to aging. Lawmaker Kim said, “Last year, elderly medical expenses exceeded 40.43 trillion won for the first time, surpassing 40 trillion,” adding, “This is why the government must take responsibility for and further expand the health insurance finances.” He continued, “I believe abolishing the sunset clause for government funding of health insurance will help stabilize financial support rather than continuously extending it.” Kang Eun-mi, a member of the Justice Party, emphasized the necessity of support, saying, “It is the state’s duty to take responsibility for the health of the people, and government funding is natural.”

Kang Do-tae, the director of the National Health Insurance Service, also agreed with the need for continuous government funding. Director Kang said, “If government support is stabilized, it will help with insurance premiums and long-term financial management,” and added, “I will actively participate in discussions and efforts in the direction of continuous and more specific support.”

Voices within the National Health Insurance Service also called for the continuation of government funding for insurance premiums. The union of the National Health Insurance Service held a picket protest before the audit in the morning, expressing the position that “a sustainable health insurance system is impossible with only premium increases from subscribers.” The union argued that if government support for health insurance is discontinued, a 17.6% increase in premiums will be inevitable.

Additionally, there are criticisms that Korea’s government funding ratio for health insurance premiums is low compared to overseas countries. According to the National Health Insurance Service, countries with social insurance-based health insurance systems similar to Korea, such as Japan, France, and Taiwan, have relatively high proportions of government funding. As of 2020, the ratio of government funding to total revenue was 23.1% in Japan, 62.4% in France, and 21.7% in Taiwan, all higher than Korea’s 14.8%.

Over the past five years, the ratio of government support to health insurance premium revenue was 13.2% in 2018, 13.2% in 2019, 14.8% in 2020, 13.8% in 2021, and 14.4% this year, never exceeding 15%. The health insurance premium support budget allocated for next year is 10.9702 trillion won, which is about 14.4% of the expected insurance premium revenue, similar to this year. This contrasts with the increase in the health insurance premium rate from 6.99% this year to 7.09% next year. Lawmaker Kim Won-i pointed out, “There is public concern that the financial burden caused by the sunset clause will eventually be passed on to individuals.”

With less than two months remaining before the expiration of the health insurance premium support provision, five related bills are pending in the National Assembly. The first was proposed by Democratic Party lawmaker Ki Dong-min in June 2020, and ruling party member Lee Jong-sung of the People Power Party also proposed related bills in November last year. Among these, three bills explicitly call for the abolition of “temporary support”: those proposed by lawmakers Jeong Chun-sook, Lee Jong-sung, and Kim Won-i.

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