Mounting concerns Over Healthcare Finance Sustainability

A recent parliamentary debate, spearheaded by members of the Democratic Party, has reignited discussions surrounding the implementation of a ‘national Responsibility System’ for elderly medical expenses. This proposal aims to address the growing financial strain on the current healthcare system,particularly as South Korea rapidly transitions into an ultra-aging society. The debate, which included participation from Democratic Welfare Committee members like kim Yun, highlighted the urgent need for systemic reform.

The Core Issue: Unsustainable Financing Models

Kim joon-hyun, Director of the Health Policy Research Institute, presented compelling research conducted by the National Institute of Health Insurance and Labor, underscoring the precarious state of health insurance finances. He argued that the current financing model is unsustainable, primarily due to limitations in premium income. With a declining working-age population and a rise in non-standard employment, relying heavily on labor market-based insurance premiums is becoming increasingly challenging.

There is a lot of deterioration in the financial deterioration of health, and considering the reality of korea that has entered the ultra -aging society, it is necessary to fundamentally change the method of operating the health.

Kim Joon-hyun, Director of the Health Policy Research Institute

Data indicates that the average annual growth rate of premium income over the past decade is 7.6%. However,projections suggest that premium income will stagnate as the premium rate approaches it’s ceiling of 8%. This financial constraint, coupled with escalating healthcare expenditures, paints a concerning picture for the future.

Expenditure Outpacing Revenue: A Looming Deficit

The debate also addressed the issue of rising healthcare expenditures. Factors such as increased policy support, a growing number of beneficiaries, and cost-oriented service expansions are driving up costs at an alarming rate. Kim Joon-hyun warned that, without significant intervention, health finances could turn into a deficit by 2026, with cumulative reserves being depleted by 2031. This projection underscores the urgency of finding enduring solutions to manage elderly medical expenses.

To illustrate the scale of the problem, Kim noted that over ₩2 trillion (approximately $1.5 billion USD) was spent on medical care by September of the previous year alone. This figure highlights the immense financial burden associated with providing adequate healthcare for the elderly population.

The National Responsibility System: A Potential Solution?

Kim Joon-hyun proposes that implementing a National Responsibility System could alleviate the financial insecurity associated with elderly medical expenses. by increasing the government’s financial contribution, the system aims to ensure stable funding for healthcare services.This would involve adhering to legal standards for health subsidies and expanding government subsidies over the next five years.

The proposed system aligns with similar models in other developed nations facing aging populations. For example, countries like Japan and Germany have implemented various forms of government-supported healthcare systems to address the challenges of an aging demographic.

Political Perspectives and the Path forward

Democratic Party members, including Kim Yun and Nam In-soon, echoed the concerns about the impending financial crisis in healthcare. Kim Yun emphasized the need to act proactively to avert the crisis, stating, I shouldn’t leave this crisis. Nam In-soon advocated for a paradigm shift in medical care, emphasizing preventative treatment over acute care and a gradual increase in government funding for medical expenses.

It is necessary to change the paradigm of medical and care. The medical expenses should be gradually paid, and the medical reform direction should be introduced while changing the direction of medical reform into pre -treatment rather than acute.

Representative Nam In-soon

The debate signals a growing consensus on the need for comprehensive healthcare reform. However,the specific details of the National Responsibility System and its implementation remain subjects of ongoing discussion and potential political contention,especially given the current government’s policy direction.