Kyoohong Cho, Welfare Minister: "Sustainability of Health Insurance is Important... Structural Reform Needed"

Health Insurance Reform Is Not a Weakening of Coverage
Support Sunset System Should Be Maintained as Is... Further Discussion Needed Later

Pensions Will Be Made for the People
March Long-Term Projection... October Reform Plan Schedule

Health and Welfare Minister Cho Kyu-hong (center) is speaking at a press briefing held at the Sejong Government Complex on the 19th. / Photo by Lee Chun-hee

[Asia Economy Reporter Lee Chun-hee] Cho Kyu-hong, Minister of Health and Welfare, emphasized that urgent reforms are needed for a sustainable National Health Insurance system. He explained that the approach will go beyond simply adjusting coverage for individual medical services to fundamentally reducing financial leakages and strengthening essential medical care. Regarding the National Pension reform, which is expected to gain momentum after the long-term financial projection is released in March next year, he refrained from commenting on the projection results but emphasized keywords such as overcoming the "allowance pension" and fairness.

Emphasizing 'Sustainable Health Insurance'... "Not a Weakening of Coverage"

At a press briefing held on the morning of the 19th at the Sejong Government Complex, Minister Cho said, "We will enhance the sustainability of health insurance," adding, "We aim to strengthen the role of health insurance by reducing financial leakages and increasing support for essential medical care and catastrophic medical expenses." He continued, "I do not believe that sustainability can be secured with existing measures," and added, "Since structural reform measures are necessary, we will include diversification of payment systems, reform of fee schedules, revision of income and expenditure management plans, and transparency in operations in the comprehensive health insurance plan to be established next year."

Regarding criticism that such reforms could ultimately lead to a reduction in health insurance benefits for the public, Minister Cho drew a clear line. He explained, "This is not a weakening of coverage but an effort to make health insurance fulfill its role by streamlining expenditures and strengthening sustainability through structural reforms," adding, "Some items such as MRI and ultrasound are being overused, and there has been insufficient structural measures for health insurance policies regarding the concentration in metropolitan tertiary hospitals and the balloon effect of non-covered services." Through this, he emphasized, "We plan to reduce side effects such as abuse and qualification fraud, expand essential medical care, and strengthen support for emergency and rare incurable diseases."

Minister of Health and Welfare Cho Kyu-hong (center right) is speaking at a press briefing held at the Sejong Government Complex on the 19th. [Image source=Yonhap News]

Regarding the controversy over ultra-high-cost treatments, such as the ultra-expensive drug 'Zolgensma,' which costs about 2 billion KRW per single dose and is being considered for health insurance coverage, he emphasized, "We will actively consider risk-sharing schemes" and continue related support. Im In-taek, Director of the Health and Medical Policy Office, added, "The reason for health insurance financial reform is to minimize waste factors to properly introduce such high-cost drugs," and "The secured budget is intended to appropriately cover high-cost drugs and essential medical care."

On the issue of the sunset clause, which is cited as a structural vulnerability of the health insurance budget, he said, "It is desirable to extend the five-year sunset clause as it currently stands." Minister Cho explained, "Since it needs to be reviewed alongside health insurance structural reforms, separate discussions are inefficient," adding, "According to projections, the statutory ceiling of health insurance premiums (8%) is likely to be reached in the near future, so national subsidies and premium increases should be discussed together." Regarding calls for fund establishment, he expressed a negative opinion, saying, "It could somewhat undermine medical expertise and restrict rapid and flexible responses in the event of large-scale infectious diseases such as COVID-19."

National Pension, "Will Not Be Made by the Government Alone"... Must Move Beyond 'Allowance Pension'

Regarding National Pension reform, Minister Cho said, "Reforms are needed to enhance sustainability, improve fairness between young and elderly generations, and ensure adequate retirement income," emphasizing, "The government will not announce alternatives and persuade the public unilaterally but will listen to expert opinions, communicate with the public, and create the plan together with the people."

Earlier, President Yoon Suk-yeol expressed his determination at the National Task Review Meeting on the 15th, stating, "We must complete systematic research and public discussions so that a finalized pension reform can be presented by the end of this government or the beginning of the next, and we must start now." Minister Cho also said, "The long-term financial projection results will be announced in March next year, and based on that, a National Pension reform plan will be announced in October."

On the other hand, some criticize the government for being too relaxed, pointing out that the National Assembly's Pension Reform Special Committee has set a deadline until April next year, and considering that the economic policy direction for next year will be announced soon, it may be difficult to include the long-term financial projection in it. Minister Cho responded, "Long-term projections involve variables such as population, economy, and pension systems," and said, "The final conclusion will likely come closer to March next year," indicating that rushing is difficult.

Minister of Health and Welfare Cho Kyoo-hong is speaking at a press briefing held at the Sejong Government Complex on the 19th. [Image source=Yonhap News]

Regarding the timeline mentioned by President Yoon, he said, "It expresses the intention to actively gather public opinions and sufficiently conduct public discussions," adding, "The concept of a finalized plan refers to comprehensive structural reforms for retirement income security, including occupational pensions," thereby declaring overall reforms encompassing occupational pensions.

However, Minister Cho refrained from detailing specific reform measures. He said, "Since the long-term financial projection is underway, it is not appropriate for the Minister of Health and Welfare to discuss any direction," but mentioned criticisms such as the pension contribution rate being lower than the OECD average and the pension amount being small, leading to the 'allowance pension' label, and said, "We will fully consider these during the public opinion gathering and National Assembly discussions."

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