On August 9, President Moon announced the government’s new healthcare plan to expand healthcare and reduce the burden of medical expenses. The new policy has invited both acclamation and controversy, which are inevitable as the so-called “Moon Jae-in Care” would transform many aspects of the healthcare industry. A need for change may be overdue for South Korea, where one out of 20 families experience bankruptcy due to the burden of medical expenses. In fact, according to the 2016 OECD health policy overview, South Korea reported the highest out-of-pocket expenditures for medical care across all OECD countries. Although it is evident that reforms are needed, will the proposed Moon Care effectively address the problems at hand?
The new policy has three main parts that collectively work towards providing sufficient medical care for all. The first component is to expand health insurance to previously uncovered treatments. The health insurance will now include procedures such as MRI, ultrasound, robotic surgery, and double hospital rooms — essentially most treatments excluding those for cosmetic purposes. The goal is to gradually add over 3800 treatments to the coverage of the health insurance by 2022. Furthermore, President Moon also called for the abolition of special care from university hospitals, which are both expensive and difficult to set up an appointment for. Hence, it can be expected that access to medical care will greatly increase, as patients will receive financial support for a wider range of treatments.
The next part of Moon Care is to reduce medical costs for those who are more susceptible to diseases — such as seniors and children under 15. As medical costs can pose a greater burden to the more vulnerable population, the policy seeks to further strengthen financial support for them. More specifically, Moon Care will reduce personal burden to under 10% for patients with severe dementia, while also lowering personal hospitalization costs to under 5% for children under 15. In the scope of this policy, the susceptible group is not only based on age, but also on the likelihood experience financial difficulties while receiving medical care. Accordingly, the government will provide financial support of up to 20 million KRW for patients in the lower 50% annual income group.
Lastly, the third component of Moon Care is strengthening support for emergency situations and setting up a medical safety net for all citizens. Currently, patients receive limited emergency support for the four major diseases: cancer, cardiac, cerebrovascular, and intractable diseases. In contrast, the new policy covers all diseases for the lower 50% annual income group. Also, social welfare teams will be established in hospitals and public institutions so that patients can stay connected to the welfare system even after leaving the hospital. Collectively, the three components of Moon Care contribute to ensuring health care for all citizens while securing support for the vulnerable in order to prevent family breakdowns due to medical expenditures.
The benefits that Moon Care will bring could not be clearer — but what are the costs for these changes? The greatest concern among citizens is regarding the rise in health insurance fees. In order to implement the new policies, approximately 30 trillion KRW will be needed. Currently, the Health Insurance Corporation (HIC) has a surplus of 10 trillion KRW, which President Moon proposed to be used towards Moon Care. Then, the remaining 20 trillion KRW will be funded by national finance, which is where the heated controversy arises. As 20 trillion KRW will be financed from tax revenues, a rise in tax rates will be inevitable. However, President Moon asserted that the rise in national health insurance fee for the next 10 years would be controlled as to not exceed the fee increase over the previous 10 years.
Regardless of the increase in health insurance fees, some question whether the surplus from HIC should be used in the first place. With the aging South Korean population coupled with rapidly falling birth rates, medical costs are expected to rise dramatically over the next few years. According to the census released by Statistics Korea, the number of elderly people over the age of 65 hit 6.8 million in 2016, which is approximately 16% of the total population; it is also predicted that this ratio will reach 40.1% by 2060. In order to prepare for the changing demographic structure and the rapidly aging South Korean society, voices that argue that the surplus from HIC should be reserved for the future seem to be well-founded.
Despite the benefits of Moon Care, it is evident that there are numerous concerns and questions that need to be addressed; debates over the potential rise in tax rates and whether the HIC surplus should be invested towards Moon Care are essential in coming up with concrete plans and reaching a consensus among citizens and policymakers. There is a long way to go for the successful implementation of Moon Care, but the value lies in that South Korea has taken the first and perhaps the most important step towards healthcare for all.