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Korea, Republic of

Home » Countries » Korea, Republic of
Current Health Expenditure (CHE) as % Gross Domestic Product (GDP)8.4%CHE/GDP
Out-of-pocket (OOPS) spending as % of Current Health Expenditure (CHE)26.7%OOP/CHE
Domestic General Government Health Expenditure (GGHE-D) as % General Government Expenditure (GGE)13.6%GGHE-D/GGE
Gross Domestic Product (GDP), in constant (2020) US$ per capita in millions (M), billions (B) or trillions (T)1.7TGDP (USD)
Population in thousands (K), millions (M) or billions (B)51.8MPopulation
Incidence of Catastrophic Health Spending at 10% Threshold (SDG 3.8.2) Total12%Catastrophic Health Spending

The Republic of Korea met its universal health coverage targets in 1989, just 12 years after the government introduced mandatory National Health Insurance (NHI) in 1977[1]. During this period, NHI membership was incrementally expanded to the entire population beginning with businesses with 500 or more employees. In addition, the Medical Aid Program (MAP), a tax funded assistance programme for the poor established in 1979, remains in place as of 2024. In 2000, previously decentralized insurance schemes were merged into a single-payer system with two quasi-public organizations – the National Health Insurance Service, which collects premiums and reimburses providers, and the Health Insurance Review and Assessment Service, which reviews claims and provides quality assurance[2]. Although the health system achieves health outcomes that exceed the Organisation for Economic Co-operation and Development  average, the degree of financial protection remains a concern given the high burden of out-of-pocket expenses in the Republic of Korea. In 2019, the country’s government implemented an NHI reform under the Comprehensive National Health Insurance Plan (2019-2023) to expand the coverage ratio of the NHI to 70% of medical expenses by 2023. 

Proactive adoption of universal long term care insurance

The Republic of Korea has the world’s most rapidly aging population. For this reason, in 2008, when older people constituted around 7% of the Republic of Korea’s population, the country put in place a mandatory long term care insurance (LTCI) scheme. LTCI features universal long term care coverage for older people. This contributory scheme addresses the financial burden of long-term care. The contribution rate is a fixed percentage of the NHI contribution rate (12.83% in 2023).[3], [4]

Readiness for social health protection during the COVID-19 pandemic

Before the COVID-19 pandemic, the Republic of Korea experienced an outbreak of Middle East Respiratory Syndrome. Following this outbreak, legislative and regulatory reforms strengthened the country’s public health emergency preparedness and response systems. Therefore, when the COVID-19 pandemic hit the country, the NHI rapidly responded. The NHI included COVID-19 related testing and medicines in the benefit package and adopted emergency relief measures. These measures included discounting the NHI contribution for individuals heavily affected by COVID-19 and providing relief funds to individuals and businesses. The NHI ensured people’s access to testing and treatment without financial barrier, in line with the Republic of Korea’s universal health coverage for its entire population.[5]
References

[1] Extending Social Health Protection: Accelerating Progress towards Universal Health Coverage in Asia and the Pacific. International Labour Organization, 2021

[2] Kwon, Soonman, et al. Republic of Korea: Health System Review. 5:4, World Health Organization, 2015

[3] Kim, Hongsoo, and Soonman Kwon. “A Decade of Public Long-Term Care Insurance in South Korea: Policy Lessons for Aging Countries”. Health Policy, vol. 125, no. 1, Jan. 2021, pp. 22–26. ScienceDirect

[4] Government of Korea, Ministry of Health and Welfare press release. 2023. Accessed 8 Apr. 2024

[5] Kwon, Soonman, et al. “Republic of Korea’s COVID-19 Preparedness and Response”. World Bank Group Korea Office Innovation and Technology Note Series, no. 3, 2020

TIMELINE OF KOREAN HEALTH FINANCING REFORMS

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Telemedicine was temporarily permitted in response to the COVID-19 pandemic

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A two-year pilot programme for community care (for aging in place) began in 16 districts

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The First Comprehensive Plan of NHI (2019– 2023) was established

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Dementia patients at an early stage became eligible for LTC insurance

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Extra charge for treatments by highly experienced specialists was banned

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Compulsory enrolment in health insurance for all foreigners and immigrants staying in the Republic Korea for more than 6 months

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A five-year benefit expansion policy, called Moon Jae-In care or Moon Care, was announced

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NBLSS reforms expanded population coverage and personalized the benefits in four categories

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The levels of eligibility of LTCIs were expanded from three to four levels

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Economic evaluation exemption for anticancer and orphan drugs

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The copayment ceiling was further expanded from three to seven income levels

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A pilot programme for RSA was launched for orphan drugs and pharmaceuticals against cancer and rare diseases

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The DRG-based payment system for seven DRG was mandatorily implemented at general and tertiary hospitals

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A five-year benefit expansion policy (2014– 2018), the Benefit Expansion Policy for Four Major Severe Diseases, was announced

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The homeless became a Type 1 beneficiary of MA

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The DRG-based payment system for seven DRG was mandatorily implemented at clinics and hospitals

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Dementia Management Act was enacted

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Pay-for-performance scheme on a few services was implemented based on quality assessments

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Copayment reductions from 10% to 5% were applied for cancer and cardiovascular diseases

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The Price-Volume Agreement was implemented

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A new DRG-based payment, a combination of prospective payment and fee-for-service, was implemented as a pilot programme

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The cost of hospitalization for Type 2 MA beneficiaries was reduced from 15% to 10%

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Copayment reductions from 20% to 10% were applied for rare and incurable diseases

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A five-year benefit expansion policy (2009– 2013) was announced

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Conversion factor for fee scheduling was subdivided by the medical institution

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Economic evaluation was required for listed drugs

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Fixed rate per diem payment system for LTC hospitals was introduced

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LTCI was introduced, separate from the NHI, but managed by the NHIC

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LTCI Act was enacted

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The user fee for outpatient care was applied to MA beneficiaries: KRW 1000 for primary care and KRW 2000 for tertiary hospitals

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The positive list system was introduced

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Copayment reductions from 20% to 10% were applied for cancer and cardiovascular diseases

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A four-year benefit expansion policy (2005– 2008) was announced

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A copayment ceiling was introduced for cumulative OOP payments over six months

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The National Basic Living Security Act, enacted from Livelihood Protection Act

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Financial accounts of the NHI schemes were consolidated

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A HIPDC was introduced to decide the coverage of benefits package

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The NBLSS was launched

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The fee scheduling method changed to be based on a RBRV system

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Medicine prescribing and dispensing were separated between doctors and pharmacists

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All health insurance funds were merged into a single national health insurer (NHIS)

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Fee schedule began to be negotiated between the insurer and provider associations

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National Health Insurance Act enacted to succeed National Medical Insurance Act (enforced on 1 January 2000)

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The Fiscal Stabilization Fund was established to reallocate contribution revenues across insurance funds

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National Medical Insurance Act enacted succeeding Medical Insurance Act

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A DRG-based payment was launched as a pilot programme based on voluntary participation

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Long-term care hospitals were introduced for rehabilitation, mental health and postacute care

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The programme covered all self-employed in urban areas, and mandatory health insurance achieved the universal coverage of population

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Pharmaceuticals were covered by the NHI benefit package

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The pilot programme covered all selfemployed in rural areas

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Employees in companies with more than 16 workers were enrolled in NHI

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The pilot programme for the self-employed was implemented in five rural and one urban areas

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Welfare of Senior Citizens Act was enacted

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A pilot programme for the self-employed was implemented in three rural areas

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Employees in companies with more than 100 workers were enrolled in NHI

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Government employees, teachers and employees of companies with more than 300 workers were enrolled in NHI

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An MA programme for people living in poverty was initiated

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Employees of large companies with more than 500 workers were enrolled in NHI

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Medical Insurance Act was revised for compulsory enrolment as a legal foundation for SHP and UHC

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Medical Insurance Act was enacted for voluntary enrolment

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Livelihood Protection Act was enacted

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