'7% Health Insurance Premium Rate Era' Next Year, Pay an Average of 25,000 Won More

Employee Health Insurance Contribution Rate 6.99%→7.09%
Legal Cap '8%' Expected to be Reached by 2026
Jo Gyu-hong "Government Subsidy and Health Insurance Rate Increase Should Be Discussed Together"

Expansion of Health Insurance Deduction for Regional Subscribers' Mortgage Loans
Deduction Now Available for Rental Housing Purchase and Refinancing Loans

[Image source=Yonhap News]

[Asia Economy Reporter Lee Chun-hee] Next year, the insurance premium rate for workplace subscribers will exceed 7% for the first time in history. As a result, the average health insurance premium for office workers will increase by 24,828 KRW.

The Ministry of Health and Welfare announced on the 20th that the partial amendment ordinance of the National Health Insurance Act, which includes this content, was approved at the Cabinet meeting. Accordingly, next year's health insurance premium rate for workplace subscribers will rise from 6.99% this year to 7.09% next year. Based on the average annual salary of 49,662,732 KRW for workplace subscribers, the average monthly premium paid by the individual will increase by 2,069 KRW from 144,643 KRW this year to 146,712 KRW next year. On an annual basis, this amounts to 24,828 KRW. Office workers and their companies each pay half of the health insurance premium.

If the monthly salary is 3 million KRW (annual salary 36 million KRW), the average monthly burden will increase by 2,900 KRW (34,800 KRW annually) from 202,710 KRW this year to 205,610 KRW next year. However, the government added that since the non-taxable limit for meal allowances for office workers will increase from 100,000 KRW to 200,000 KRW per month starting next year, the actual increase for those benefiting from this system will be about 64 KRW per month.

This is the first time the health insurance premium rate for office workers has exceeded 7%. The premium rate has rapidly increased by 2-3% annually under the previous administration. The average increase rate over the past five years (2018?2022) is about 2.7%. Concerns are growing that the current legal ceiling of 8% will soon be breached. Considering the increasing trend in medical usage and the reform of the health insurance premium assessment system, if the rate continues to rise by around 3% annually as it has, it is expected to reach the legal ceiling by 2026.

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

At a press briefing held the day before, Minister of Health and Welfare Cho Kyu-hong indicated intentions to initiate related discussions during the health insurance reform process. Minister Cho explained, "There is a possibility that the legal ceiling for the health insurance premium rate will be reached in the near future," and added, "We need to discuss both government subsidies for health insurance and the increase in health insurance premiums together."

The amount per insurance point for regional subscribers' premiums was also raised from 205.3 KRW to 208.4 KRW. However, since the 'Income-Centered Health Insurance Premium Assessment System Phase 2 Reform,' which mainly reduces premiums for regional subscribers, has been implemented since last September, significantly lowering their burden once, it is expected that the additional burden next year will not be substantial. The average monthly health insurance premium paid per household by regional subscribers decreased from 107,630 KRW in January to 88,906 KRW last month, a drop of 17.4%.

Apartment buildings in the Mokdong area, Yangcheon-gu, Seoul [Image source=Yonhap News]

Additionally, the amendment ordinance passed on this day includes expanding the scope of deductions related to housing finance debt for regional subscribers. Previously, deductions were only possible for loan amounts excluded from the property value used to calculate insurance premium points if the loan occurred within three months before or after the earlier of the housing acquisition date or move-in date. Refinancing loans or loans taken to purchase a rented house were not eligible for deductions under the previous rules, despite the recent low-interest-rate environment.

However, with this amendment, deductions are now allowed if ▲a loan is taken to purchase a currently rented residence or ▲a refinancing loan is taken to lower the interest rate or extend the repayment period of a previous mortgage loan. This is because the acquisition date of ownership is used as the reference for purchasing a rented house, and the date of the initial mortgage loan is used as the reference for refinancing loans.

The Ministry of Health and Welfare expects that about 6,000 people will additionally benefit from refinancing loans and about 3,000 people from purchasing after renting as of the 16th.

The amended ordinance will take effect from January 1 next year. However, the expansion of the deduction scope for housing finance debt will be implemented immediately from the date of promulgation.

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