How to alleviate the strain on healthcare balance sheets has been a topic of incessant debate, and the three-nation healthcare conference earlier this week again stoked discussion on National Health Insurance (NHI) reform.
A South Korean speaker on the South Korean healthcare system and its future possible reforms said in his presentation on Monday that the health insurance premium’s income structure has been long regarded as unfair in South Korea.
“Eighty-two percent of the 77 million complaints filed in 2011 were about health insurance premiums,” South Korean health official Jang Soo-mok said.
Jang said the National Health Insurance Corp, the single insurer that administers South Korea’s health insurance system, which is facing widespread discontent and a premium contribution system that has failed to raise sufficient funds, has some suggestions for the reform of the premium-levying system.
Integrating the existing various premium-levying standards — based on whether the policyholder is employed or self-employed, whether they have an extra income of a certain amount and whether they have dependents — into one single income-centered levying standard is the central idea of the proposed reform, Jang said.
Jang said the aim is to levy contributions on all kinds of income, including earned incomes and passive incomes, such as rent from property, dividends, interest, annuities, inheritance, conveyance and gifts, and to revoke the existing premium rate assessment factors of age, sex, car ownership and assets — factors for assessing how the self-employed should pay — to ensure sufficient funding.
The corporation also proposes ending the extended coverage of the insured employees’ dependents, who account for about 41 percent of healthcare benefit users, to curb people from posing as the dependents of insured employees to be exempt from premium payments (or who are self-employed, but registered themselves as employees).
When asked whether the move to collect premiums from all kinds of income (including passive incomes) resembles what Taiwan had initially proposed for the second-generation NHI, for example, levying NHI premiums by household, Jang said that the reform is to collect premiums from all sources of income, suggesting that the reform is aimed at collecting premiums individually.
Chu Hsieh-kuang(朱顯光), head of research and development at the Taiwan Healthcare Reform Foundation, said that what South Korea is planning to implement is a by-person system.
However, the South Korean government’s proposed by-person system differs greatly from Taiwan’s wage-based NHI system in collecting premiums from all kinds of income, including overtime, inheritance and gifts, the foundation said.
“What we hoped for, which was also the original idea of the second-generation NHI, was a household-based system, like how taxes are levied, because we see vertical equity as more crucial than horizontal equity,” Chu said.
It is in this way that it might be similar to South Korea’s proposed reforms.
“However, the proposal met strong opposition, so the government fell back on collecting supplementary premiums. A household-based NHI premium-levying system is the final goal and we hope the government remains resolute in its effort to complete the reform,” Chu said.
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