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    Intellasia East Asia News – State-run healthcare struggling under Moon administration

    The prolonged COVID-19 pandemic is causing an unexpectedly large health insurance deficit this year. Critics were quick to blame the deficit on President Moon Jae-in’s policy, dubbed “Mooncare,” which plans to expand the coverage of the state-run health insurance to 70 percent by 2023, and warned of its failure. But experts and the National Health Insurance Service (NHIS) view it’s too early to worry.

    According to data from NHIS, the health insurance deficit reached 943.5 billion won in the first half of the year, up 548.9 billion won from a year earlier, as the country has suffered from financial difficulties due to the unprecedented pandemic.

    The deficit marked the third year in a row that the health insurance balance has been in the red. In 2019 the current account deficit stood at 3.2 trillion won and in 2018 it was at 177.8 billion won after running a surplus for seven straight years.

    The administration vowed to continue expanding NHIS coverage, especially for those in the low-income brackets, children and elderly, but Mooncare is facing strong protest from political opponents and medical doctors.

    Critics of Mooncare claim premium increases are inevitable and the health insurance fund may run out of money as early as 2023 if the President maintains his rigid stance on boosting the health insurance coverage rate to 70 percent by the end of his term. Conservatives warns that if Mooncare’s pace remains unchanged, health insurance finances will be left severely depleted.

    ‘Planned’ deficit for expanding coverage

    An NHIS official said the concerns have been exaggerated to a degree.

    “In fact, the government is already aware of the increase in the deficit in the health insurance area and the subsequent decrease in accumulated cash reserves. The government has set up a fiscal plan, believing that the deficit will naturally increase as the national health insurance coverage expands,” said an anonymous official from the NHIS’ finance and management department.

    “In particular, last year’s health insurance deficit was a planned one to strengthen the coverage expansion. Following the expansion of health insurance coverage for major non-indemnities such as ultrasound and magnetic resonance imaging checkups, as well as the use of emergency rooms and intensive care units, the deficit was already expected.”

    One thing to take note of is that when Moon took office, the NHIS had a reserve of 20 trillion won. The President promised to expand coverage to bring the amount down to 10 trillion won and also increase insurance premiums moderately so that the surplus could be maintained around 10 trillion won after 2023.

    Experts said the deficit isn’t a major concern at this stage considering the current amount of the NHIS’ cash reserves.

    “Of course its success will depend on the health insurance’s fiscal soundness, and Mooncare did not start just because the NHIS has sufficient cash reserves. However, to reach the goal to expand the insurance coverage, the increasing budget spending is inevitable,” said Jeong Hyoung-sun, a professor at Yonsei University’s department of health administration.

    Experts point out that debt growth also needs to be analysed from a different perspective.

    After treating a patient, a hospital charges the health insurance service for medical treatment and receives the medical treatment cost one or two months later. This treatment fee must be paid to the hospital later, so it is considered a debt. But this year, most of the deficit the NHIS posted was mainly due to a change in the method of paying medical expenses to hospitals. As the number of patients increased due to the influence of coronavirus spreading, hospitals were able to receive part of their medical expenses from the NHIS in advance.

    Considering this point, experts claim, it is not reasonable to say that the debt has suddenly increased due to the expansion of insurance coverage.

    “Let’s say the government spent 10 trillion won although they originally planned to spend 5 trillion won for the coverage expansion, then it would be a huge problem. But now the government has been keeping up the level of expenditure which they initially planned,” said Kim Yoon, a professor of department of medical management at Seoul National University.

    Kim also stressed that it is more important to create a fiscal expenditure efficiency mechanism that reduces wasteful spending while expanding the national insurance coverage.

    “The NHIS has been using the accumulated cash reserves for the deficit right now, but after 2023, the time will come when they will have to raise the premium and balance the income,” he said. “The government needs to come up with a clear plan, and communicate with the public about the benefits that the increase in insurance premiums will bring.”

    https://www.koreatimes.co.kr/www/nation/2020/08/119_294452.html

     

    Category: Korea


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