"Paying the Same Health Insurance Fee but Called ‘Free Riders’: Angry Overseas Koreans"

[Asia Economy Reporter Byeon Seon-jin] As the government steadily strengthens the qualifications for receiving medical benefits to prevent ‘health insurance freeloading’ by overseas Koreans and foreigners, there is backlash from migrant communities claiming reverse discrimination. They argue that strengthening the health insurance management system for all foreigners to prevent some ‘free riders’ is unfair. Migrants lament, “For various reasons, we visit hospitals less often than natives, yet our coverage keeps shrinking.”

On the 8th, the Ministry of Health and Welfare announced a health insurance reform plan that includes strengthening the qualification requirements for foreigners as dependents, including overseas Koreans. Until now, foreigners such as spouses, minor children, and even parents-in-law could receive health insurance coverage as dependents immediately upon entering the country. The new rule requires a mandatory six-month residency period for those other than spouses and minor children.

Health insurance workplace subscribers can have dependents whose income and assets do not exceed a certain level. Registered dependents can receive medical benefits without paying health insurance premiums. This is equally applied to foreigners, including overseas Koreans, under the special provisions for foreigners in the National Health Insurance Act (Article 109).

[Image source=Yonhap News]

The problem is that there have been cases where foreign dependents who contracted illnesses abroad entered the country, received medical benefits, and then returned to their home countries. A representative case involved patients with rare and incurable diseases who needed expensive and continuous prescriptions, receiving about 3 billion KRW in medical benefits since 2017 through this method.

Overseas Koreans and Foreigners: "We pay the same health insurance premiums as natives, but coverage standards keep changing"

The reason dissatisfaction is growing among overseas Koreans and foreigners is that the health insurance coverage standards are gradually diverging from those of natives. Mr. A (in his 40s), an overseas Korean residing long-term in the United States, said, “I am registered as a dependent under my father-in-law and pay health insurance premiums regularly, but I feel unfair because I cannot receive medical cost support after entering the country.” He added, “For simple treatments, I don’t necessarily use health insurance benefits, and compared to the U.S., it doesn’t feel expensive. However, if I were to contract a serious, hard-to-cure illness, I would naturally be very worried.”

Regarding this, Professor Kim Yoon of Seoul National University College of Medicine’s Health Management Department said, “The essence of insurance is to reduce patients’ medical expenses due to unpredictable illnesses. If a foreign dependent has a pre-existing condition before entering the country, it violates the principle of insurance. This is different from natives who are born in the country, pay premiums, and then receive medical support when they fall ill.”

However, Professor Kim noted, “Freeloading by foreign health insurance dependents is only a minority case, and setting the residency period to six months for foreign dependents will not significantly secure financial soundness. Rather than applying this to all foreigners to prevent some cases, it would have been more appropriate to establish a system at the dependent registration stage to determine whether the person is trying to receive health insurance benefits immediately due to a serious illness.”

Foreign Health Insurance Management System Continues to Strengthen to Prevent ‘Freeloading’

The foreign health insurance management system has been continuously strengthened to prevent freeloading by some foreigners. However, foreigners and overseas Koreans who do not exploit institutional loopholes complain about the inconvenience caused by this.

In July 2019, the Ministry of Health and Welfare implemented a mandatory health insurance enrollment system for foreigners and overseas Koreans, requiring those staying in Korea for more than six months to enroll compulsorily. Previously, foreigners and overseas Koreans could voluntarily enroll as regional subscribers after staying in Korea for only three months.

Mr. B (in his 50s), an overseas Korean, said, “I have been paying health insurance premiums consistently for over 10 years, but in 2020, when air travel was blocked due to COVID-19, I couldn’t enter Korea within three months, so I lost all health insurance benefits. The National Health Insurance Service told me that I must stay for six months to maintain coverage. I have overseas business, so this is impossible,” he lamented.

Son Ho-jun, Director of Insurance Policy at the Ministry of Health and Welfare, explained, “The reason for strengthening the foreign health insurance management system has been to block freeloading cases where foreigners enter for medical purposes. Since the health insurance system is welfare for natives residing in Korea, it is difficult to view this as discrimination. Even if the foreign health insurance system is strengthened, it will not affect most foreigners and overseas Koreans, and preventing unfair cases will enhance the trustworthiness and financial soundness of the health insurance system.”

[Image source=Yonhap News]

The financial balance of foreign health insurance has consistently recorded a surplus. This means that the total premiums paid by foreigners exceed the total medical benefits they receive.

According to the National Health Insurance Service, last year, overseas Koreans and foreigners paid 1.5793 trillion KRW in premiums, while the amount received as health insurance benefits was 1.0668 trillion KRW. Foreign health insurance recorded a surplus of 512.5 billion KRW last year. Previous surpluses were 225.5 billion KRW in 2018, 365.8 billion KRW in 2019, and 572.9 billion KRW in 2020. One reason for the higher income than expenditure in foreign health insurance is primarily language barriers.

The surplus increased in 2020 and last year after COVID-19. A health insurance official said, “While the decrease in hospital visits due to COVID-19 is a factor, the biggest impact was the system change in July 2019 that forcibly enrolled foreign regional subscribers who previously had to report voluntarily. During this period, the number of foreign regional subscribers surged, and since it was difficult to accurately assess their income and assets, they had to pay premiums above the average paid by all subscribers.”

"If Foreign Health Insurance Coverage Standards Keep Differing from Natives, It Contradicts the Purpose of Health Insurance to Guarantee the Right to Health"

Experts express concern that the systems implemented to prevent so-called ‘health insurance freeloading’ contradict the purpose of health insurance to guarantee the right to health and may have adverse effects. Moon Sim-myeong, a legislative researcher at the National Assembly Legislative Research Office, said, “Strengthening the foreign health insurance management system has intensified disadvantages compared to natives, which may reduce the acceptance of low-income foreigners and negatively impact the guarantee of the right to health.” Professor Kim Myung-kwang of Daegu University stated, “The economic expected effect of one foreign student is 15 million KRW, so if the number of foreign students decreases due to health insurance premiums, it will be a loss for the entire country.”

Professor Kim Yoon said, “The government’s approach to revising the foreign health insurance system to prevent abuse by some foreigners may contradict social solidarity.”

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