How public and private health insurance coverage mitigates catastrophic health expenditures in South Korea

Abstract

Background: Korea has instituted a private health insurance (PHI) scheme that covers the remaining expenses uncovered by the National Health Insurance (NHI). No study has yet estimated the extent to which PHI coverage lowers the economic burden of household access to health care. The current study intends to evaluate the design of Korea's PHI system in terms of coverage using a catastrophic health expenditure (CHE) indicator and compare it with NHI. Methods: This study determined the difference between the number of households subscribed to PHI and the number of households that paid benefits. Also, it compared the effects of reduced CHE through NHI benefits with those of PHI. Furthermore, it compared PHI benefit rates by income class. Finally, it analyzed the benefit contribution of NHI and PHI to CHE reduction through a two-part model with hierarchical regression. Results: Results indicated that of the 5,644 households studied, 3,769 subscribed to PHI, but only 246 households received benefits. The NHI reduced CHE incidence by 15.17%, whereas PHI only reduced CHE by 1.22%. The NHI scheme indicated reduced inequality as it provided more benefits to the low-income class, whereas the PHI paid more to the high-income class. The NHI coverage has protected households from CHE and improved equality to some extent; however, PHI coverage has had little effect on relieving CHE and has deteriorated equality. Conclusions: Korean private insurance companies, which are mostly subsidiaries of for-profit conglomerates, only pay for pre-contracted diseases, therefore, most patients do not receive benefits. Thus, Korea's private insurance system needs to improve to provide benefits to patients more generously and alleviate the financial burden of medical use.

Association of Primary Care Physician Supply with Population Mortality in South Korea: A Pooled Cross-Sectional Analysis

“…In South Korea, 97% of the population is covered by the national health insurance scheme, and medical aid is provided to ensure medical access for the poor. 3) Under a fee-for-service reimbursement system, providers are encouraged to increase the volume and intensity of patient care rather than improve health outcomes. 2) Many providers in South Korea practice as single operators.…”