The Triangular Axes of Universal Health Coverage Achievement: The Success Factors Behind Korean Community-Based Health Insurance Expansion

Abstract

Though it has passed over 30 years, Korea’s community-based health insurance (CBHI) expansion can provide useful policy implications to developing countries with similar conditions, that is, lack of fiscal resources, health infrastructure, and medical resources to expand coverage to the informal sector. We summarized three groups of success factors through in-depth interviews and narrative analysis: system design, system operation, and public perception of the system. Korean CBHI could expand to the informal sector with the same system design as the formal sector such as mandatory enrolment, compulsory designation of medical service providers along with the low-benefit, low-contribution, and a low-payment system. However, expansion to the informal sector was somewhat different, as the CBHI exercised and operated the scheme with flexibility, semi-autonomy and leadership to fit for local context in terms of operation. Moreover, cultural factors that encouraged public awareness and increased participation significantly contributed in appealing to the informal sector. Overall, the systemic, operational, and cultural factors interacted with each other and created a synergy effect that local members in the informal sector found attractive.

Achieving Universal Health Coverage in Developing Asia and the Pacific

“…Identification of these factors can provide policy implications for developing countries under similar circumstances that are working toward achieving UHC. Kim and Kang (2022) categorized the nine key factors that contributed to the successful expansion of CBHI in the Republic of Korea into three groups: (i) system design, (ii) operation, and (iii) public awareness and participation, as shown in Table 1.…”

“…Additionally, CBHI schemes operated independently, and the central government did not directly intervene with the financing of these systems to avoid taking on the financial burden. However, the central government did cover 20%-30% of subsidies through a designated loan scheme (Kim and Kang 2022). To cover the remaining finances, CBHI schemes had to develop efficient mechanisms of financing for contribution collection, a levying system, and protocol for addressing delinquencies, among others, according to the economic conditions of the community and within the legal framework established by the government.…”

“…The government utilized a fee-for-service system and set the amount at 55% of customary fees from the beginning of the health insurance system in 1977. While they had low levels of contribution, people in the informal sector still saw a reduction of 50% for OOP medical expenditures (Kim and Kang 2022). The government implemented this system across two pilot programs before expanding nationally.…”

“…The CRVS system also enabled the CBHI scheme to track changes in eligibility, manage contributions and payments, and manage other administrative components related to the subscribers' profiles (Kim and Kang 2022). Having such a system in place is a precursor for implementing any sort of social protection program, the CBHI scheme, and even tracking demographic changes.…”

“…For example, at the local level, to address the challenges of billing and reaching those in remote areas, community leaders delivered the bills directly to customers. This also helped to reduce delinquent payments and built trust in the community, ultimately increasing support for CBHI schemes (Kim and Kang 2022). Since local officers and staff are most familiar with the local context, they are in the best position to tailor operations and ensure the successful expansion of the CBHI scheme.…”