Premium Setting in the Korean Health Insurance System

: Issues and Challenges

Abstract

In Korea there has been great dissatisfaction and distrust regarding inequitable health insurance premiums. The National Health Insurance Service reports that in 2013, it received 57.3 million complaints regarding premiums, accounting for 80 percent of the total complaints. Complaints about premiums were the most common health and welfare―related complaints fielded by the Anti―Corruption and Civil Rights Commission between 2008 and 2012. The Park Geun―hye administration has showed its intent to make strong efforts to address the problem of arbitrary premium―setting practices, but has yet to unveil concrete reform plans. A principle that the reform shall develop “premiums levied mainly on the basis of income” has been announced in its basic plan. It is, however, uncertain whether “premiums levied mainly on the basis of income” can be legislated into law. This paper reviews reform plans to date on premium―setting rules in Korea, discusses their problems, and considers alternative reform plans.