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Impact of shrinking, aging population is palpable

Posted November. 07, 2019 07:21,   

Updated November. 07, 2019 07:21


Korea’s health care spending for the elderly has surpassed 30 trillion won while the overall payout of the National Insurance soared to 79 trillion won – a change resulting from a growing elderly population and the so-called “Moon Jae-in care” that expanded health insurance coverage and subsequently increased the number of patients.

The National Health Insurance Service (NHIS) released the 2018 Health Insurance Statistics Wednesday, which shows that people aged 65 or over take up 13.9 percent of the population and spend 41 percent of the total health care expenditure. This age group’s per capita medial expenses stand at 4.56 million won, which increased 1.5 times compared to six years ago and is expected to reach 7.6 million won by 2030.

The Korean population is aging at an unprecedented pace. At the current rate, it will be a matter of time before the finances of the NHIS will become a pressing issue. This is why the government should pay more attention to the sustainability of the “Moon Jae-in care” instead of focusing solely on promoting its benefits. The Moon administration should learn lessons from Japan, which introduced a plan in 2008 in an attempt to curb its excessive medical costs. The Korean government also needs to put more effort into raising the public’s awareness that the health of seniors is important not only for individuals but also for society. It is also worth noting that there is a link between the elderly’s social engagement and medical costs.

Low birth rates are also affecting the education and national defense sectors. Finance Minister Hong Nam-ki announced the “plan to buffer the effects of the shrinking population,” which introduces a series of measures to counteract the impact of a decreasing number of students and conscripts. The government will cut down the size of the standing troops to 500,000 from 580,000 and will consider increasing the share of female soldiers and mandating naturalized citizens to serve in the military. Teachers’ pay will also be adjusted, decreasing their wages further down from last year’s 2030 plan, which will likely provoke an outcry from teacher trainees. This new plan is the second phase of the demographic policy reform introduced by the cross-department task force. The first phase increased the retirement age, and the third phase will be announced later.

In fact, low birth rates and a shrinking and aging population are closely intertwined, affecting one another. Counter measures are necessary to respond to challenges and run a nation more efficiently. However, in order to address the root cause, the government needs to come up with ways of encouraging couples to have babies, which will push up the birth rates and increase a workforce. We need to continue our endeavor to find solutions as it takes more than a couple of policies to create an environment where young people want to have children.