August 11, 2017 12:38
President Moon Jae-in on Wednesday promised to boost public health insurance coverage to all treatments and medications except cosmetic surgery. The government will pick up most of the tab for MRIs, ultrasound, consulting specialists, hospital room expenses and nursing care. Moon said the increased coverage will slash individual medical expenses by 18 percent over five years and by 46 percent for low-income households.
A considerable number of Korean households end up going bankrupt due to hospital fees or give up treatment due to soaring costs. These people certainly need to be helped. Korea's health insurance coverage stands at 63.4 percent, far below the OECD average of 80 percent.
But where will the money come from? The Health Ministry expects the extended coverage to cost an extra W30.6 trillion over five years, and most of that will come from a W21-trillion public health insurance fund, while the rest will be covered with taxpayers' money. But the Ministry of Strategy and Planning warned the fund will shift to the red next year and run dry by 2023. If that is correct, the government may not be able to tap into the fund or end up drawing only a small amount of money from it.
Expanded medical coverage will result in explosive growth in the number of patients. Back in 2006, the Roh Moo-hyun administration adopted measures to exempt children under six hospital room fees, which meant that vastly more young patients spent the night in hospital and the government had to scrap it after just two years. It therefore seems likely that MRI and ultrasound exams will skyrocket as well.
On top of that, Korea is the fastest-aging society in the world, and senior citizens require lots of medical care. The reason past administrations were unable to boost coverage was precisely because they needed to stockpile funds to cover the ever-increasing medical fees of senior citizens. That stockpile totals W21 trillion and the government now wants to use it (US$1=W1,143). It may last five years, but what will happen once Moon's five-year term ends?
The government is pursuing a lot of very expensive policies, including a nuclear-free energy policy with a promise not to raise electricity fees for five years, and a hefty hike in the minimum wage. The president seems to feel that taxpayers will come to his rescue every time. He only has five years, but the public may be saddled with the consequences for a long time.
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