South Korea Considers Increase in Health Insurance Premiums to Ensure Sustainability

SEOUL — The South Korean government announced on Sunday that it will initiate discussions on raising state health insurance premiums, aiming to maintain the sustainability of the program in the face of the country’s declining birth rate and aging population. The Ministry of Health and Welfare has introduced the second comprehensive state health insurance plan for the period of 2024-2028, which includes proposals to increase the monthly premium limit for salaried workers beyond the current cap of 8 percent to accommodate rising medical expenses.

According to Yonhap News Agency, this move is in response to demographic shifts, including a continuing decrease in the birth rate and an increase in the elderly population. For the first time last year, the number of individuals aged 70 and older surpassed those in their 20s, coinciding with an economic downturn. These trends have heightened concerns about the long-term viability of the health insurance system.

The government plans to review premium rates in comparison with those of other countries to determine an appropriate rate for South Korea. Currently, health insurance premiums in nations such as Germany, France, and Japan are significantly higher, ranging from 10-11.82 percent to 16.2 percent.

Efforts to bolster the financing of the state insurance program include identifying new revenue sources. For instance, the government has already implemented a policy requiring individuals who earn unexpected or one-off incomes, such as high-earning YouTubers, to pay additional premiums on their earnings.

For 2024, the ministry decided to freeze the monthly premium rate at 7.09 percent, marking the first time in seven years that the rate has not been increased. This decision was influenced by the insurance program's "relatively stable" financial condition, alongside concerns about high inflation and interest rates. It is the third instance of a premium freeze in South Korea, following similar decisions in 2017 and 2009.

Under South Korean law, all citizens are required to enroll in the health insurance scheme, which is also available to foreigners residing in the country. This system is a cornerstone of the nation's healthcare policy, ensuring broad access to medical services.

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