Depleting Health Insurance Fund Reserves... Public Debate on Government Subsidies vs Fund Establishment

Assemblywoman Kang Eun-mi and Others Hold Emergency Press Conference on the Morning of the 6th
"Sunset Clause Must Be Completely Abolished Through the Bill Subcommittee"
"Also Demand Fund Establishment for Fiscal Soundness"

On the 6th, at the National Assembly Communication Office, Kang Eun-mi, a member of the Justice Party, the Health and Medical Workers' Union, the Korean Confederation of Trade Unions, the Federation of Korean Trade Unions, the Public Transport Workers' Union, and the National Health Insurance Service Union held a press conference urging the expansion of government subsidies for health insurance and the abolition of sunset clauses.
Photo by Kim Young-won

[Asia Economy Reporter Kim Young-won] There is a clash between the argument that government subsidies should be maintained for health insurance facing a financial crisis of deficits and depletion, and the argument that health insurance finances should be fundized.

On the 6th, Kang Eun-mi, a Justice Party lawmaker, and the National Health Insurance Corporation labor union held a press conference at the National Assembly Communication Hall, stating, "Eleven bills demanding the legalization of government subsidies for health insurance have been submitted to the National Assembly, and during the recent audit, several lawmakers urged the abolition of the sunset clause. However, due to partisan conflicts, it has not been addressed until now, and discussions have started hastily as the sunset approaches." They added, "Through today's bill subcommittee, the sunset clause must be abolished so that the state can take permanent responsibility for health insurance." The Health and Welfare Committee's bill subcommittee reviewed 17 amendment bills to the National Health Insurance Act and the National Health Promotion Act. These included proposals by lawmakers Jeong Chun-sook, Lee Jong-sung, and Kim Won-i, which specify the abolition of the 'temporary support' related to the sunset system.

Currently, health insurance premiums receive 20% of the expected revenue amount as support from the national treasury. According to the National Health Insurance Act, 14% of the expected premium revenue for the year is supported from the general account, and according to the National 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 expire after a certain period. If the law is not amended by the end of this month, government subsidies for health insurance premiums will end. The abolition of the sunset clause has been consistently raised in the National Assembly's Health and Welfare Committee. Kim Won-i, a Democratic Party lawmaker, said, "Last year, elderly medical expenses exceeded 40.43 trillion won for the first time. This is why the state must take responsibility for and further expand health insurance finances," adding, "I believe abolishing the sunset clause for government subsidies to health insurance will help stabilize financial support rather than continuously extending it." Kang Eun-mi said, "It is the state's duty to take responsibility for the people's health, and government subsidies are natural."

Park Min-sook, vice-chair of the Health and Medical Workers' Union, said at the press conference, "Although the National Health Insurance Act stipulates that the state should bear 20% of the expected premium amount, the government has not complied every year, and the amount underpaid so far has reached a whopping 32 trillion won." She added, "Next year’s budget is planned to cover only 14.4%, far below 20%, and with less than a month left until the sunset clause expires at the end of this year, the situation is very uncertain." According to the National Health Insurance Corporation, the government support ratio compared to health insurance premium revenue over the past five years was 13.2% in 2018, 13.2% in 2019, 14.8% in 2020, 13.8% in 2021, and 14.4% this year, all below the legal standard of 20%.

There is also an argument that fundization is better than government support. Given the projection that health insurance will record a deficit of 1.4 trillion won starting next year and that reserves will be depleted by 2028, government subsidies are seen as having a strong deficit compensation character rather than ensuring long-term fiscal soundness. Earlier, in July, the Board of Audit and Inspection pointed out in its audit report, "Unlike other social insurances that undergo National Assembly review for budgets and settlements, health insurance is managed by the Ministry of Health and Welfare for both budgets and settlements, lacking external control over total expenditures." It also noted, "Including government subsidies as income hides the financial deficit status, and health insurance finances are excluded from national finances, causing underestimation of expenditure scale." Currently, health insurance-related policies are deliberated and decided by the Ministry of Health and Welfare's Health Insurance Policy Deliberation Committee, with the Ministry leading the entire process.

On the 7th of last month, Seo Jeong-sook, a People Power Party lawmaker, introduced amendment bills to the National Health Insurance Act, National Health Promotion Act, and National Finance Act to establish the basis for fundization of health insurance and fund operation plans. Seo said, "Considering the speed and scale of expenditure increases in health insurance finances operated through the general account rather than national finances, fundization is necessary." Kang Ki-yoon, also from the same party, proposed an amendment bill in 2020 to establish the National Health Insurance Fund and have the Minister of Health and Welfare manage and operate it. However, these bills were not included in the agenda of the Health and Welfare Committee's bill subcommittee on this day.

Kang Do-tae, president of the National Health Insurance Corporation, stated at the September audit, "If government support is stably determined, it will help with premiums and long-term financial management," adding, "We will actively participate and strive in discussions in the direction of continuous support and concretization of support."

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