Drive for National Pension and Health Insurance Reform... Expanding Essential Medical Services and Strengthening Welfare for the Vulnerable

Ministry of Health and Welfare Work Report
Fiscal Projections for Pension Reform Discussions to Be Released This Month
Population Paradigm Shift from Low Birthrate to Aging

President Yoon Suk-yeol is speaking at the Ministry of Health and Welfare, Ministry of Employment and Labor, Ministry of Gender Equality and Family, Ministry of Food and Drug Safety, and Korea Disease Control and Prevention Agency briefing held at the Blue House State Guest House on the 9th.
[Image source=Yonhap News]

[Asia Economy Reporter Lee Gwan-ju] The Yoon Seok-yeol administration is accelerating its core tasks of reforming the National Pension and Health Insurance systems. This month, it will advance the announcement of the National Pension financial projections, which form the basis for pension reform discussions, and will also actively promote measures to establish a sustainable health insurance system.

On the welfare front, the government plans to strengthen 'welfare for the vulnerable' and lower the barriers to access. Measures will be prepared to respond to the crisis in essential medical services such as pediatric and adolescent care, alleviate the burdens of childbirth and child-rearing, and improve systems for comprehensive responses in the era of aging. A blueprint was also presented to foster the bio-health industry, aiming to launch two global blockbuster new drugs by 2027 and to become one of the top five medical device exporting countries.

On the 9th, the Ministry of Health and Welfare reported to the Presidential Office its major work plan under the vision of a 'robust welfare state for future leap.' This year, the Ministry plans to focus its policy capabilities on four major tasks: ▲expanding welfare for the vulnerable ▲strengthening essential medical services ▶pursuing welfare reforms including pensions and health insurance ▲preparing for a better future.

Expanding Comprehensive and Robust Welfare for the Vulnerable

Having designated last year as the 'first year of welfare for the vulnerable,' the Ministry will first identify socially vulnerable groups and provide them with stronger support, while also responding to new welfare demands. To accurately identify households in crisis, the types of crisis information used?such as records of catastrophic medical expenses support and arrears in water and gas bills?will be expanded from 39 to 44 categories.

The median income standard, which serves as the selection criterion for various welfare programs including livelihood benefits, will be raised by 5.47%, lowering the welfare threshold. Accordingly, from this year, the livelihood benefit eligibility for a four-person household will increase from 1.54 million KRW to 1.62 million KRW. To protect children's rights, the adoption system will be restructured to meet international standards, and a roadmap to gradually shift from facility-centered protection to family-based care will be implemented, along with the promotion of the enactment of the 'Child Basic Act.'

Ministry of Health and Welfare Work Report.

In the field of welfare for persons with disabilities, an emergency care pilot project will be operated from April to reduce the caregiving burden on guardians of persons with developmental disabilities. The disability pension will be increased from a maximum of 388,000 KRW to 403,000 KRW per month, and the disability allowance will rise from 40,000 KRW to 60,000 KRW.

Additionally, to strengthen youth welfare, support for income and case management will be expanded for youth preparing for independence, and customized services such as housekeeping, caregiving, and rest will be provided by locating young family caregivers through schools and local governments. The Youth Tomorrow Savings Account will also be significantly expanded this year. The related budget will increase from 28.9 billion KRW last year to 157.4 billion KRW this year, and the number of account holders will rise to 119,000 to support asset formation.

Strengthening Essential Medical Services to Protect Life and Health

Measures will be implemented to overcome the crisis in pediatric and adolescent medical care systems, which was a major issue last year. Supplementing the recently announced 'Essential Medical Support Measures,' a system to strengthen care for severe and emergency cases, childbirth, and pediatric treatment will be established. In the second half of this year, additional measures will be prepared to support areas where appropriate treatment is difficult due to poor medical environments and shortages of specialized personnel. The government also expressed its intention to speedily promote policies such as institutionalizing telemedicine and increasing medical school quotas through a permanent consultative body with the medical community.

The easing of COVID-19 quarantine measures will continue to be reviewed. The indoor mask-wearing mandate will be shifted from mandatory to recommended once the epidemic stabilizes and indicators are met, and the infectious disease classification will be adjusted from the current level 2 to endemic level when entering the endemic phase. To manage high-risk groups, vaccinations and oral therapeutics will be actively prescribed to the elderly to prevent severe illness, and special quarantine and medical support will be provided to infection-vulnerable facilities such as nursing hospitals.

A medical system to respond to large-scale disasters will also be established. The emergency medical system will be improved in terms of preparedness, communication systems, and capabilities (joint training involving fire departments, public health centers, and disaster medical support teams). Regional trauma centers will be gradually expanded from 4 to 17 locations at the city and provincial levels to provide continuous response to disaster trauma, and the functions and personnel of mental health welfare centers will be expanded by two staff members per center.

Furthermore, in preparation for the 100-year lifespan era, infant health checkups will be enhanced to ensure all children can live healthily throughout their lives, and mental health checkups for youth will be strengthened. Support will be provided throughout the life cycle, including expanding elderly health management projects utilizing artificial intelligence (AI) and the Internet of Things (IoT), and chronic disease management centered on primary care will be reinforced based on this foundation.

Pursuing Sustainable Welfare Reform

Reforms of health insurance, the National Pension, and welfare expenditures are key tasks of the current government. Regarding health insurance, the priority is to secure sustainability by improving financial efficiency through proper health insurance premium assessments and preventing financial leakage. To this end, efforts will focus on need-based coverage, fair qualification and premium systems (including foreigners), rational medical use inducement (management of excessive users), strict crackdown on illegal activities, and management of non-covered services. A 'Health Insurance Reform Plan' will be prepared in the second half of this year, expected to include measures for fee normalization and transparency enhancement, expansion of health insurance equity, and improved accessibility to high-cost treatments and innovative medical technologies.

Regarding pension reform, the schedule for the National Pension financial projections, which will serve as the basis for discussions, will be advanced from March to January to invigorate reform discussions and support the swift preparation of reform proposals. The minutes of the Financial Calculation Committee meetings will be fully disclosed, and expert forums will be broadcast in real-time to ensure transparent procedures. A 'People's Pension Reform Plan' will be developed, and a comprehensive operational plan linking National Pension system improvements with the basic pension will be submitted to the National Assembly in the second half of the year, including a process for gathering public opinions.

Welfare expenditures will also be restructured in a way that citizens can feel the impact. The Ministry will review overlaps and duplications in social security projects of central government agencies and prepare and implement an 'integrated maintenance and adjustment plan for concentration and omission.' A social security system database (DB) will also be established. To ensure transparent and efficient management of welfare subsidies, illegal executions and waste factors will be controlled, and a mid- to long-term whole-of-government strategy for a sustainable Korean-style welfare state will be proposed.

Preparing for a Better Future

Population policies and bio-health strategies that can turn crises such as low birth rates, ultra-aging society, and low growth into opportunities will be promoted. The core is to shift the population policy paradigm from focusing on low birth rates to preparing for an ultra-aging society and population decline. Issues related to population decline and ultra-aging society in various sectors such as economy, industry, education, employment, and national defense will be identified, and the '4th Basic Plan for Low Birth Rate and Aging Society' will be supplemented.

Support to alleviate the child-rearing burden on parents in the early stages of childbirth and parenting will be strengthened. The 'parental allowance,' implemented from this month, is a representative example. Parents of children aged 0 will receive 700,000 KRW per month, and those with children aged 1 will receive 350,000 KRW per month. To prepare for cases where parents raising children at home suddenly need temporary care, part-time childcare will be expanded and services improved. To enhance the quality of childcare services at daycare centers, the evaluation system will be restructured to focus on consulting, and improving the treatment of childcare staff is also included as a task.

In preparation for the full-scale aging era, a comprehensive response system will be established. The basic pension will increase from 307,500 KRW to 323,180 KRW, and nearly 40,000 jobs will be created. The elderly care system will be shifted to a community-centered model, supporting medical care through the expansion of home medical centers, dementia care primary physicians, and integrated medical and nursing assessments.

Alongside this, a strategy to become one of the six major bio-health powers will be pursued. To establish health security, essential vaccines will be domestically produced, and next-generation vaccines and therapeutics will be developed to respond to future pandemics. Support will also be provided for domestic production of artificial blood and xenotransplantation technologies. A support system for goal-oriented strategic research and development (R&D) projects, such as rare disease treatment technologies, will be established.

Furthermore, to fully support bio-health development and exports, a plan to nurture 110,000 talents will be established in the first half of this year, and regulatory innovations such as an integrated review system for innovative medical devices and expanded grace periods for new medical technologies will continue. The industry will be strategically supported to develop two global blockbuster new drugs and achieve fifth place in medical device exports by 2027. Specifically, plans include creating additional funds such as the 'K-Bio Vaccine Fund.'

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