South Korea's health insurance authorities are pushing to expand the income settlement system for health insurance premiums to all subscribers. If introduced, 3.94 million self-employed and regionally insured households would pay an additional 3.3 trillion won ($2.3 billion) in premiums, while 2.32 million households would receive refunds of about 1.8 trillion won ($1.27 billion).
According to a report on major business operations submitted by the National Health Insurance Service (NHIS) to the National Assembly's Health and Welfare Committee during a parliamentary audit on the 20th, the authorities are seeking to introduce a universal income settlement system to improve fairness in premium burdens. The core of the plan is to shift from the current system, in which settlements are made at a subscriber's request, to one in which administrative agencies verify income and settle premiums on their own authority.
Workplace subscribers currently pay premiums based on the previous year's wages and then have them settled each April according to finalized income. By contrast, regional subscribers and workplace subscribers with income outside their salaries have no regular settlement procedure, meaning changes in income were not promptly reflected in premiums.
Under the new system, settlements would be conducted once a year on the agency's own authority, based on finalized income data from the previous year held by the National Tax Service. The measure would cover 9.08 million regional subscriber households and 1.1 million workplace subscribers with income beyond their salaries.
The NHIS analysis found that 3.94 million regional subscriber households would have to pay an additional 3.2911 trillion won because of higher income. The 2.32 million households whose income fell would receive a total of 1.8014 trillion won in refunds. Households with no change in income would see no change in premiums from the settlement.
Given that only 210,000 regional subscriber households received refunds last year by filing their own applications, the number of households eligible for refunds is expected to rise sharply once settlements are made on the agency's own authority.
The NHIS projected that subtracting refunds from additional payments would produce 1.4897 trillion won a year in added health insurance funding. The authorities plan to use the additional resources to support regional and essential medical care and to expand coverage for rare and severe diseases.