Battle Brewing Over Spending Health Insurance Surplus

The accumulated surplus of the National Health Insurance Corp. has exceeded 2.4 trillion won, disproving the expectation that a deficit would snowball due to a surge in chronic disease and aging.

Civic organizations and doctors have locked horns over the surplus. Civic groups say the surplus should go to expand medical benefits while the medical sector wants to raise its fees.

▽ Health insurance surplus

The insurance corporation said its accumulated surplus reached 2.45 trillion won in August, up 173.5 percent or 1.55 trillion won from December last year.

The monthly surplus has stayed between 30 billion and 150 billion won, though an unusual deficit of 11.7 billion won occurred in April.

Though news of the surplus sounds positive, the majority of experts say the surplus has resulted from the economic downturn. This means many Koreans have hesitated to seek medical help with the drop in disposable income from the sluggish economy and surging oil prices.

Lee Gi-yeong, 33, a housewife in Seoul, said, “We have endured pain this year because of little disposable income regardless of increasing inflation. My husband and daughter saw a doctor three or four times last year but have halved the number of visits this year.”

Lim Jae-hyeon, president of Nanoori Hospital, said, “More patients are coming to the hospital after enduring pain as long as possible. It’s really sad that some patients have developed more serious diseases while enduring pain.”

The changes in patient hospital visits can be found in statistical data. Health insurance spending (the amount of medical charges paid by the insurance corporation) rose 7.5 percent in the first half of the year, falling from 13.2 percent in 2005, 17.7 percent in 2006, and 13.8 percent last year.

Other factors contributing to the surplus include charging 10 percent of hospitalization costs for patients aged five and under; raising the patients’ burden for food from 20 percent to half; raising health insurance premiums 6.4 percent.

▽ More benefits vs. higher medical fees

Civic organizations say the surplus should be used to provide more support for patients with serious diseases, abolish the doctor’s fee and cover more dental services such as dentures for senior citizens.

The insurance corporation is also planning to spend the surplus to provide more services. It will raise the health insurance coverage rate from 64 percent to the 70 percent level.

“We need to provide more benefits for patients with serious diseases to help all patients see doctors without financial difficulty,” a corporation official said.

Doctors, on the other hand, say priority should go to raising medical fees, which they say are too low.

In the first preliminary negotiation Monday, the Korean Hospital Association said, “Given the large health insurance surplus, we expect the government to raise the level of medical fees significantly.”

The insurance corporation is expected to face stronger demand for higher medical fees in its negotiations with the Korean Medical Association, Korean Dental Association, Korean Oriental Medicine Association and Korean Pharmaceutical Association. The talks will last through Oct. 15.

Doctors say the government set the growth rate for medical fees at a lower-than-expected level last year -- 2.3 percent for medical practitioners’ offices and 1.5 percent for hospitals -- due to the corporation’s deficits.

zozo@donga.com