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Government to control ‘actual medical expense insurance’
  • By Yang Geum-deok
  • Published 2017.09.19 17:01
  • Updated 2017.09.20 10:09
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The government will move to control “actual medical expense insurance” by enacting a related law governing its management, to increase the coverage of health insurance through turning uncovered items into covered ones, officials said Tuesday.

Experts have pointed to the need to not only convert uncovered medical services and products into covered ones but improve the coverage of actual medical expense insurance to increase the coverage of health insurance as pledged by President Moon Jae-in. In response, government officials made it clear that they would improve the product designs of the actual medical expense insurance that causes moral laxity, and lower insurance premiums.

Reps. Kim Sang-hee김상희 and Lee Hak-young이학영 of the ruling Democratic Party held a forum to discuss the “role of actual medical expense insurance to implement ‘Mooncare,’” at the National Assembly Library.

“Health insurance is a mandatory social insurance but actual medical expense insurance is an optional insurance, in which subscribers visit hospitals more frequently and use uncovered services more than non-subscribers do,” said Huh Yoon-Jeong허윤정, a professor at Ajou University School of Medicine in his topic presentation.

Huh said the government should lower insurance premiums as much as the unsolicited gains of actual medical expense insurance companies, and manage health insurance and actual medical expense insurance by linking them together and regularly monitoring the latter.

“The coverage rate of the health insurance in Korea is the average of the Organization for Economic Cooperation and Development (OECD) countries. Now that private insurance is affecting the health insurance, the government has to make a system by connecting them,” Professor Huh said. “It is necessary to manage and supervise private insurance through the institutionalization of the latter by, for instance, enacting a special law.”

Reps. Kim Sang-hee and Lee Hak-young of the ruling Democratic Party co-organized a forum on the “role and situation of actual loss coverage insurance,” at the National Assembly Library Tuesday.

Some participants in the forum said the design of the actual medical cost insurance is the problem and the government has to revise the frame of the insurance.

“About 30 percent of people who are non-subscribers of the actual medical cost insurance insurance are low-income brackets, seniors, and patients, who need insurance benefits most but are excluded from them,” said Kim Jong-myung김종명, chief of the medical team of the “Welfare State I Make,” a civic group. “Nevertheless, insurance companies have manipulated the media saying it is the only insurance with more than 100 percent in risk loss ratio. But the point is they have made a product that induces moral laxity.”

“The insurance has generated the problem of overinflating uninsured treatments because it guaranteed both patients’ share of medical costs and uninsured treatments. Accordingly, even though the government expands the coverage, the coverage rate won’t increase,” Kim said.

Other participants said the government should maintain intensive control to prevent the increase of uninsured treatments.

“As long as there remains the system that continues to create uninsured treatments, it will end up only fattening the pockets of pharmaceuticals and medical equipment makers, and uninsured treatments will increase,” said Kim Kyung-ja김경자, vice chairwoman of Korean Confederation of Trade Union민주노총. “There should be ways to expand coverage control uninsured treatments drastically.”

The medical community agreed on the need to connect private and public insurance but emphasized the necessity to improve business practices of private underwriters.

“The problem of uninsured treatment costs is the increase of uninsured treatments that patients can choose such as nutritional supplements,” said Seo In-sok서인석, insurance manager of Korean Medical Association (KMA)의협. “I agree with the direction of Mooncare, but the provision of insurance benefits to standby pays and selective treatments can result in excessive public demand.”

“It is necessary to prevent moral hazard by connecting private insurance and public insurance, reduce exaggerated ads by private insurance companies, and improve their sales policy,” Seo said.

Kim Phil-soo김필수, a manager at Korean Hospital Association (KHA)병협, said he admitted hospitals prefer uninsured treatments in hospitals. If the government turns all uninsured treatments into standby pays, it will not only hinder the development of medical industry but also result in other problems, including the fiscal crisis of health insurance.

“The key to Mooncare is to guarantee enough medical costs in insured treatments, but not focusing on primary uninsured treatments,” Kim said. “The government has to think how it raises funds and makes medical technology and the pharmaceutical industry develop through the compulsory designation system.”

Participants also said there was a problem to make claims and assess them in actual medical cost insurance. Except for the insurance industry, all were against the consignment of the assessment to Health Insurance Review & Assessment Service (HIRA)심평원.

“If the Mooncare succeeds, the effectiveness of actual medical expense insurance will fall, forcing people to cancel them. Regulators will have only to individual shares of the insurance then,” said Lee Jae-goo이재구, director of General Insurance Association of Korea 손해보험협회. “In the past, we recommended to consign the assessment to HIRA, but HIRA failed to manage it well.”

“It doesn’t make sense the government didn’t control uninsured treatments,” Professor Huh refuted. “All countries operate uninsured treatments, but insurance companies made the product even though they knew the conditions of uninsured treatments, which increased their loss rate.”

“It is necessary to standardize and computerize the application form and connect it to insurers to monitor uninsured treatments. National Health Insurance Service (NHIS)국민건강보험공단 outsourced to check the situation of uninsured treatments. And if we can connect them to private data, we can get accurate information,“ said Hyun Jae-ryung현재룡, vice chairman of health insurance policy institution at HIRA.

The government said it would seek alternatives along with the Ministry of Health and Welfare복지부 and Financial Services Commission금융위원회. The commission said it would check the insurance, verify statistics, and simplify the application processes.

“We will consider the idea to exclude individuals’ shares from the insurance, from the standpoint of the public,” said Sohn Joo-huyng손주형, director of the commission’s Insurance Service Division. “We will cooperate with the health authorities to make a policy consultation group and discuss details about the related law.”

“If it is necessary to analyze the unsolicited benefits of underwriters and reduce premiums, we will do so,” he said. “Also, we will make public the risk loss rate and the aggregated loss rate.”

The ministry said the insurance industry wasn’t interested in the loss rate, and a law is necessary to calculate the unsolicited benefits.

“NHIS set the patients’ shares not because it didn’t have money but because it wanted to prevent moral hazard. But the medical cost coverage insurance removed the shares and patients didn’t pay at all. These products can be barriers to the Mooncare. And it is necessary to change them in reasonable ways,” Sohn Young-rae손영래, director of the ministry's Health Insurance Policy Division.

“Because the government decided to return the unsolicited benefits to people, the commission will return them by reducing insurance costs or taking other measures. To implement the two agendas well, the related law should be available that the commission and the ministry have to discuss and manage it,” Sohn said.

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