Running Out... Is Injecting 190 Billion Won of Health Insurance Funds into Medical Care Gaps Okay? [News SeolCham]

The government has decided to use approximately 190 billion KRW per month from the National Health Insurance (NHI) funds to fill the medical gap caused by the mass departure of residents. This extraordinary measure aims to maintain emergency medical services amid a situation where 92% of residents have left the medical field.

The government's confidence in medical reform, including increasing medical school quotas and strengthening essential medical services, is backed by the NHI finances, which have recorded surpluses for three consecutive years. According to the National Health Insurance Service on the 11th, last year’s NHI funds posted a surplus of 4.1276 trillion KRW, bringing the accumulated reserve fund to a record high of 27.9977 trillion KRW. The accumulated reserve fund is used to cover insufficient insurance benefit costs or when cash is lacking due to short-term liquidity deterioration.

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However, the NHI financial balance is expected to turn into a deficit starting this year. With accelerating low birth rates and aging population, the NHI funds are projected to be depleted in just four years.

In October last year, the National Assembly Budget Office forecasted in its '2023-2032 Health Insurance and Long-term Care Insurance Financial Outlook Report' that if the current insurance premium rate increase level is maintained, the NHI financial balance will turn into a deficit this year and the accumulated reserve fund will be exhausted by 2028. By 2032, the accumulated deficit is expected to reach 61.6 trillion KRW. Despite three consecutive years of surplus, the NHI Service has also stated that it is difficult to guarantee financial sustainability due to external factors such as future economic uncertainties and the increasing elderly population.

Therefore, the government has begun social discussions on raising the legal ceiling for NHI premium rates. This was included in the '2nd Comprehensive Plan for National Health Insurance' announced by the Ministry of Health and Welfare on the 4th. The premium rate ceiling is currently set at 8% of income, but concerns about the sustainability of finances have been raised due to stagnant premium income caused by rapid aging and low birth rates. The Ministry plans to discuss raising the premium rate ceiling by referring to other countries such as Japan (10-11.82%), France (13.25%), and Germany (16.2%).

Medical staff are moving at a university hospital in Daegu on the 7th.
[Photo by Yonhap News]

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In a situation where financial sustainability is a concern, the NHI funds have also taken on the role of a 'relief pitcher' due to the residents' departure. On the 7th, the government decided at the Central Disaster and Safety Countermeasures Headquarters meeting for the medical community’s collective action to support emergency medical services with approximately 188.2 billion KRW per month from the NHI funds. This will be used to strengthen post-compensation for severe patient hospitalization and to establish new policy support funds to provide additional compensation when specialists treat intensive care unit patients.

The government believes that the injection of NHI funds is limited to this month only, so there should be no problem with financial management. Lee Jung-kyu, head of the field communication team at the Central Disaster and Safety Countermeasures Headquarters, said, "As part of the emergency medical measures, 180 billion KRW will be injected for one month only," adding, "Currently, the overall NHI finances are being operated stably, and it is judged that operation within that financial scope is sufficiently possible."

In addition to the NHI funds, the government will urgently inject 128.5 billion KRW in contingency funds for substitute personnel wages and extended public institution medical services. This will support wages for medical personnel on night and emergency duty, temporary dispatch of public health doctors, and recruitment support for medical personnel. It will also be used to support inter-hospital transfers for severe and emergency patients.

However, if the mass departure of residents prolongs, more medical expenditures may be required. The medical gap that began on the 20th of last month has entered its third week. Compared to the six-day medical strike in 2000 against the separation of drug prescribing and dispensing, and the one-day strike by private practitioners in 2014 opposing telemedicine, this situation can already be considered prolonged. Despite the government’s tough response, including prior notification of license suspension, residents show no signs of returning. As of 11 a.m. on the 6th, 91.8% (11,219 out of 12,225) of residents affiliated with the top 100 training hospitals were found to have abandoned their contracts and left their workplaces.

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