민주연구원

2. Moon Jae-in Care: The government takes responsibility for the people's health

□ Announcement of 'Moon Jae-in Care' to bring paradigm shift to National Health Insurance(NHI) system

○ On August 9, President Moon announced the ‘Measures for expanding the NHI coverage,’ in which he promised to reduce the medical costs by extending the NHI coverage to most medical procedures.

- This measure is ground-breaking in that it does not stop at 'gradual cutback of coverage exemption' but instead it aims for 'complete coverage for all medically necessary procedures.'

- Currently, NHI covers about 60% of medical treatments; by 2022 this will be expanded to 70%, strengthening the role of NHI as social safety net and preventing household bankruptcy.

○ The three opposition parties support the policy direction, but criticizes its lack of financial provisions.

- At the meeting with Blue House Chief of Staff on August 10, President Moon claimed that the financing plans were thoroughly reviewed, and appealed that the plan will be carried out only gradually by 2022 in order to maintain healthy finances.

□ People's medical costs will be drastically reduced with secure financial resources.

○ Strengthening the social safety net and alleviating concerns for medical cost by providing the medical care system covered solely by the NHI

- Medical cost takes up about 36.8%(OECD, 2014) of average household income (2nd highest among the OECD countries); the burden of medical expenses that invite household bankruptcy, such as catastrophic health expenditures, must be reduced in the near future.

- By covering three largest medical costs that are excluded from current NHI system (selected treatments, special hospital rooms, and nursing cost) and introducing complete coverage of all necessary medical treatments, the medical cost for the people will be reduced by 18%, and the non-insured medical expenses will also go down by 64% (KRW 13.5 trillion → 4.8 trillion, based on YR2015 statistics).

- The number of patients who pay more than KRW 5 million a year will decrease by 66% (391,000 → 132,000), and by 95% for low-income households (123,000 → 6,000).

○ Despite a number of debates, such as concerns for financial resources and ‘balloon effects’, these can be dealt with through effective utilization of financial resources and structuring of preventive measures.

- The cost for these measures can be estimated as KRW 30.6 trillion for the duration of five years from second-half of 2017 to Year 2022; Yet the increase of NHI fee can be maintained at the level of past 10 years by utilizing KRW 20 trillion from the accumulative reserve, expanding state subsidies to NHI system, and minimizing the ineffective spending

- In order to prevent the 'balloon effects' from aggrandizing the different types of non-insured treatments, the government is prepared to provide systematic measures such as expanding of 'Diagninosis–Related system(DRG)'

□ National consensus has been reached on the expansion of NHI coverage, and the people expect more active implementation of related policies.

○ All parties, both ruling and opposing, as well as NGO have agreed upon the policy direction.

- 70% of the people support these policy measures (The Hankyoreh, August 9).

- The opposition parties point to the financial issues, while the NGO’s voice their expectations for wider coverage than proposed by the government; But they are all in agreement when it comes to 'extending coverage to all medically necessary treatment.'

○ In order to guarantee ever-more-equal public medical care, the government must continue to press forward with these policies.

- 70% of insurance coverage which is set as the goal of related measures, is still less than the average of OECD countries which cover 81% of all medical costs; the government must continue to build social consensus in expanding the range of NHI coverage.

- It is becoming increasingly necessary to consolidate public medical system, including the reform of health care deliver system.