Kang Cheong-hee, president of the National Health Insurance Service (NHIS), stressed the need for stable government funding as South Korea's health insurance program is projected to post nearly 21 trillion won ($14.7 billion) in operating losses over the next five years. He also said the program must rationalize its spending structure rather than rely solely on expanding premium revenue, at a time when state support falls short of the legal standard.
Kang made the remarks on the 16th at a parliamentary audit of the NHIS by the National Assembly's Health and Welfare Committee, responding to a question on health insurance finances from Rep. Lee Soo-jin of the Democratic Party of Korea. "I believe stable government funding is essential," he said.
Lawmakers described the program's finances as a chronic problem that recurs under every administration. When Rep. Kim Tae-ho of the People Power Party noted that the issue has persisted regardless of which party is in power, Kang said: "Eight years ago, when I served as the NHIS benefits director, we made many efforts to resolve the financial problems, but they still have not been solved. I think the reason is that the public already bears a heavy tax burden."
"We cannot sustain the finances indefinitely just by expanding the revenue base, so we need to rationalize the spending structure," he added. "My view is that we should pursue efficiency by managing operations skillfully to get the maximum effect from less money."
The outlook is difficult. According to the NHIS medium- to long-term financial management plan for 2026 through 2030, the operating loss this year is expected to reach 6.9161 trillion won. Losses are projected to continue at 3.9714 trillion won in 2027, 4.2971 trillion won in 2028, 3.4415 trillion won in 2029 and 3.2932 trillion won in 2030. The cumulative operating loss over the five years comes to 20.9193 trillion won, meaning deficits in the trillions of won every year.
State support, meanwhile, remains below the level set by law. The government has budgeted 13.8 trillion won in health insurance subsidies for 2027, about 1.1 trillion won more than this year. The figure combines 11.8 trillion won from the general account and 2 trillion won from the National Health Promotion Fund. Still, the subsidy rate stands at 14.4%, short of the 20% legal standard. Unpaid statutory subsidies over the decade from 2016 to 2025 total 19.4531 trillion won.
The share of government support is also low by international comparison. According to the National Assembly Budget Office, Korea's government share of health insurance funding averages 14%, below Japan's 23.2%, Taiwan's 30.5% and France's 55.0%.
The NHIS labor union has also called for greater state funding. The National Health Insurance Workers' Union staged a picket protest in front of the agency's headquarters in Wonju, Gangwon State, where the audit was held, demanding permanent government support for the program.
"To secure the stability of health insurance finances, the government must move away from shifting the premium burden onto the public, faithfully fulfill its statutory funding obligations and establish a sustainable and stable financing system," the union said.
The union added: "It is also a problem that the legal provision for government support operates under a sunset clause renewed every five years. If the continuation of government support becomes periodically uncertain, it is harder to draw up medium- and long-term plans for health insurance finances, and that can also hurt stable benefit management and efforts to ease the public's medical cost burden."
Lee also said: "I think this is a critical time to ensure that government support reaches at least the 20% level, even if that requires reforming the system. Looking at the financial outlook, anyone would think so."
Kang said the agency is "working to secure a commitment to predictable government funding," adding: "We have to guarantee sustainability for future generations, so we are doing this regardless of my term in office."