President Moon Jae-in’s recent pledge to cover all treatments will increase demand for medical services and devices and positively affect the healthcare industry, a brokerage house said in a recent report.
President Moon announced last week that his administration would strengthen the coverage of health insurance to give benefits to all medical treatments, lessening people’s financial burdens and increasing coverage rate to 70 percent.
Under the plan, the government will invest 30.6 trillion won ($26.8 billion) until 2022 to reduce individuals’ burden by 18 percent, covering dentures, implants, dementia treatment, MRIs, and ultrasounds, among others.
The government’s plan will have a positive impact on related industries by increasing their sales to meet rising demand, according to the report by SK Securities.
In particular, the new measures will help around 99,000 elderly in need of dentures by decreasing individuals’ burden from 50 percent to 30 percent of total costs. Denture costs will drop from an estimated range of 600,000 won to 380,000 won, increasing demand for the prosthetic device industry, the report said.
For about 54,000 people who need implants, the cost will also fall from 600,000 won to 360,000 won.
The demand for dementia treatment will also rise to reduce individual payment to drop from 20-60 percent to 10 percent. Last year, around 69,000 dementia patients spent an aggregate 2.4 trillion won, or 4 million won per patient.
The report also predicted increased demand for medical equipment, as the “Moon Jae-in care” will cover all medical treatments (except for cosmetic ones), such as MRIs and ultrasounds, leading to a boom in the medical device industry.
Concerning the bio industry, the report forecasts a “relatively positive impact” on biosimilar developers as expensive bio treatments will be exempt from the new policy, along with cosmetic treatments like Botox injection.
Effects on the healthcare sector as a whole will be neutral since the policies will have little to no impact on the pharmaceutical sector, according to the brokerage report. Most medicines sold domestically have already received benefits from national health insurance.
The report also addressed concerns about depleting government funds, saying the government will likely increase accumulated savings by raising insurance premiums at a steady 3 percent and pursuing policies that reduce financial costs.
The government had announced earlier this month it will draw 20 trillion won from the National Health Insurance System’s accumulated savings for the new plan.
“Experts will need to wait and see the policy’s effects in the long run,” the report added.
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