Korea’s health insurance system for foreign residents undermines the acceptability of expat subscribers and deepens discrimination against them, a researcher said.
“There have been frequent news reports about some foreign subscribers exploiting the nation’s health insurance system inappropriately,” the researcher said. “The government has recently strengthened the management of foreign subscribers, but the system’s acceptability has fallen, and discrimination increased.”
Moon Shim-myung, a researcher at the National Assembly Research Service’s division for the social and cultural study, said so in a report titled “The current situation of the foreign residents’ health insurance system and ways to improve subscriber acceptability,” released on Wednesday.
Currently, foreigners become workplace subscribers to health insurance if they are employed by health insurance business establishments.
In the other case, foreigners automatically become regional subscribers to health insurance after six months of entry and their spouses and underage children.
According to National Health Insurance Service (NHIS), there were 1,646,681 registered foreigners as of 2021, and 1,264,430 were health insurance subscribers – about 690,000 workplace subscribers and 570,000 regional subscribers.
Insurance premiums imposed on foreigners totaled about 1.54 trillion won ($1.24 billion) as of 2020, up 98.7 percent from 775.6 billion won in 2016. Among the total, 460.9 billion won was imposed on regional subscribers, six times higher than in 2016. Insurance benefit expenses to both workplace subscribers and regional subscribers totaled 954.2 billion won
Moon noted that although surplus has accrued in health insurance finance since the government strengthened standards for health insurance subscription and coverage, there were consequent adverse effects.
The researcher pointed out that the authorities have recognized only subscribers’ spouses and underage children when the two households become one through reunion since 2018. The stricter standard was aimed to prevent the avoidance of premium payments by foreigners through false residential registrations or address changes.
However, it has often resulted in a situation where the insurance authorities send several sheets of insurance premium notification to a family, as some family members are not recognized as household members although they live under one roof.
In 2019, the authorities also revised the rule by calling for foreign subscribers whose premium amount falls short of the previous year’s average level to pay the average premium amount.
However, Moon pointed out this rule undermines the principle of equity.
As low-income foreign regional subscribers have to pay the monthly average amount of insurance premiums if they cannot prove their income and property, he said the foreigners end up paying larger premiums than Korean regional subscribers.
In 2021, foreign regional subscribers paid 124,770 won on average a month in 2021, higher than the 97,221 won paid by all regional subscribers, including Koreans.
Moon called for the need to relax conditions for foreign residents’ health insurance system.
Changes in foreigners’ health insurance, including the introduction of a natural sub subscription system, will likely help to replenish the health insurance budget and reduce ill effects, including adverse selection and medical blind spots, Moon said.
“However, the deepening of disadvantages compared to locals can reduce low-income foreign residents’ acceptability and adversely affect their health rights,” Moon said. “The government should continue to monitor the current system to reduce discrimination while enhancing the system’s reasonableness and acceptability.”