0311-Healthcare reform

There are two ways middle-class Koreans fall into poverty: through losing their jobs or getting serious illnesses. So, during last year’s presidential election, Park Geun-hye vowed to cure four of the most common, and costly, diseases free of charge, while Moon Jae-in promised that the government would take care of all medical bills on portions exceeding 1 million won ($910).

Now President Park is backing away from her pledge amid outcries from families with chronically-ill members and sneering from political opponents. Even if Moon had taken the top job, he might have done largely the same, however, given the fiscal health of the nation’s health insurance system. 

A recent report by the National Health Insurance Corp. (NHIC) shows that the rapidly-aging population and low birthrate would swell its yearly deficit up to 132 trillion won by 2060 in a worst-case scenario.

Korea’s health insurance system has achieved astounding success despite its relatively late debut: the number of its beneficiaries increased from 3.2 million (9.8 percent of population) in 1977 to 49.3 million (96.8 percent) in 2011 to become national insurance both in name and function. But the low-burden, low-coverage and high-deficit system needs to reform itself to be sustainable.

In brief, there are two contrasting systems of health insurance - those in the U.S. and the U.K. The former minimizes government’s burden by taking care of only the old and poor - although Obamacare has sharply expanded the scope of beneficiaries recently - leaving too many people in the dead angle of health services. The latter requires the state to provide healthcare for all people free of charge. This seems to be far better, except that services are sometimes delayed and of poor quality. 

Korea should seek best equilibrium between costs and benefits, and between the state and individual burdens, befitting of its own circumstances.

Most urgent in this regard is to expand its revenue base, which now unduly relies on salaried workers, as the nation’s pension system does. The authorities should ferret out up to 5 million free-riders in the system, wealthy individuals with financial assets and high-income professionals who often disguise themselves as low-wage workers. Officials will need to consult the tax authorities to grasp overall incomes and properties of the insured. Some doctors and patients also show moral laxity, slipping through loopholes to obtain excessive treatment and prescription abuse.

As far as healthcare pledges are concerned, we think Moon’s plan was better because there are numerous types of chronic diseases besides the four major illnesses inflicting needy families. President Park might as well adopt her former rival’s idea, and develop it into “Geun-hye care.”

This is The Korea Times editorial for Thursday, Feb. 28, 2013.