Chairman Jeong Gi-seok: "Health Insurance Premiums Should Increase by About 1% Next Year"

Jung Ki-seok, the President of the National Health Insurance Service (NHIS), expressed the opinion that health insurance premiums should be increased by about 1% next year. Although the health insurance system holds reserves exceeding 20 trillion won, expenditures are increasing within limited resources, raising growing internal and external concerns about sustainability. The government plans to minimize the health insurance premium increase rate for next year.

On the 14th, President Jung held a press briefing at Dalgaebi in Jung-gu, Seoul, stating, "If the health insurance premium rate is frozen, a deficit in the health insurance finances is inevitable," and added, "Considering the mid- to long-term financial plan, the minimum increase should be made in a way that minimizes harm to the public." He also noted, "There was only one time in 10 years when the premium rate was frozen, and the following year it rose by more than 2% immediately."

The health insurance premium rate has increased every year except in 2017. It rose around 1% over four years: 1.6% in 2013, 1.7% in 2014, 1.35% in 2015, and 0.9% in 2016. After freezing in 2017, it increased by 2.04% in 2018 and reached 3.49% in 2019, the highest increase in eight years. Subsequently, the increase rates declined for three consecutive years: 3.20% in 2020, 2.89% in 2021, and 1.89% in 2022. This year, the health insurance premium rate for workplace subscribers is 7.09%, up 1.49% from last year.

As of the end of last year, the health insurance finances had accumulated reserves of 23.8701 trillion won. President Jung expressed concern, saying, "The current reserves of 23 trillion won only cover two months of payments," and warned that if the premium rate is frozen next year, it will be difficult to maintain even 1.5 months' worth of reserves needed for benefit payments five years from now." The health insurance premium rate moves in line with the medical benefit costs paid to healthcare providers. Next year, the medical benefit costs paid to medical institutions and pharmacies will increase by 1.98%. Considering that the government supports about 20% of the health insurance finances through national treasury contributions, if the health insurance finances become difficult, the tax burden on the public could ultimately increase. According to President Jung, a 1% increase in health insurance premiums would generate 737.7 billion won in revenue next year.

The Need to Introduce the Special Judicial Police System

President Jung also called for the introduction of the Special Judicial Police (SJP) system to prevent leakage in health insurance finances. He explained, "If the SJP is established, it would result in financial savings of up to 200 billion won." The SJP system grants investigative authority over illegally operated hospitals run by non-medical professionals and pharmacies lending pharmacist licenses (license-lending pharmacies) to NHIS employees. Currently, related legislation is pending in the National Assembly.

From 2009 to December 2021, over 13 years, the total amount recovered from 1,698 illegally established institutions that were detected and ordered to repay reached 3.3764 trillion won. However, the recovery rate was only 6.02% (202.6 billion won) because many hospitals close during investigations. The average time for investigative agencies to investigate these illegally operated hospitals is 11.8 months (with a maximum of 4 years and 5 months). Among the 1,698 illegal institutions, 1,635 (96.3%) have closed to date, with over 80% shutting down during investigations. It is known that if the SJP system is introduced, investigation time could be reduced to about three months.

President Jung emphasized, "The Miryang Sejong Hospital, which experienced a fire accident, was also an illegally operated hospital," and added, "To reduce public harm and prevent leakage in health insurance finances, we will strengthen the detection of illegally established institutions through the SJP system."

President Jung also stated, "We will prepare 'standard treatment guidelines' to reduce medical expenses by preventing the public from undergoing unnecessary excessive tests or treatments."

Finally, President Jung said, "The fundamental duty of the NHIS is to expand insurance coverage so that premiums are used effectively," and added, "We will create a culture of honest and transparent communication with the 51 million subscribers."

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