Health Insurance Budget Records Additional Deficit of 737.5 Billion Won This Year

The Health Insurance budget is anticipated to record an additional deficit of 737.5 billion won even by failing to accomplish the goal of the `general measures to stabilize the health insurance budge` released by the government on May 31 this year. Therefore, the accumulated deficit seems to amount as much as 1 trillion 862.7 billion won, which is much larger than the original goal of the government, which was, 1 trillion 125.2 billion won.

Vice Minister of Health and Welfare Lee Kyung-Ho briefed the `Mid-term report on the 5.31 Health Insurance Budget Stabilization Measures` and explained that "the misestimating of the Ministry was caused by the delayed implementation of the tobacco shares up to 329.6 billion won and the unexpected retirement allowance of the Health Insurance Corporation, 321.0 billion won."

In addition, other financial measures in 16 areas to reduce the budget by 1 trillion 88.7 billion won achieved only 97 percent of its goal (1 trillion 57.4 billion won), making 31.4 billion won deviation.

The measures to increase the income of Health Insurance Corporation and to reduce the payments exceeded the goals by 58.6 billion won and 3.9 billion won respectively. However, for the reduction of the medicine cost and the adjustment of the customers share recorded 60 billion and 34 billion won deficit respectively.

Vice Minister Lee explained, "the deficit amount is likely to increase much larger than expected by the delayed implementation of the tobacco shares, the unexpected retirement allowance, and the cancellation of the reference price system. However, once the tobacco share is approved by the Congress and implemented from next year, the financial goal will be accomplished without much difficulties."

However, if the tobacco share is not added to the health insurance budget, the accumulated deficit of the health insurance budget will be about 2 trillion 700 billion won, which far exceeds the original goal, 1 trillion 487.9 billion won. It`s because of the estimated 600 –700 billion won deficit by the setback of tobacco shares in addition to the 650 billion won of the deficit brought forward.

Meanwhile, the Ministry of Health and Welfare cancelled the reference price system that the insurance covers only up to the double amount of the standard price to prevent the overuse of high cost medicines.

Vice Minister Lee said, "it is difficult to implement the system due to the possibility of the trade conflicts and I think that the system is not likely to be introduced."

Chul Moon fullmoon@donga.com