30 Years of Korean Health Insurance: Its Success, Failure, and Future Directions

Shin, Young Soo

Abstract

At the juncture of cerebrating the 30-year anniversary of Korean Health Insurance (KHI), which has been introduced since 1977, this paper reviews a brief history of KHI development, and its impacts on the health and the health care system in Korea. It took only 12 years that KHI had accomplished the total coverage of Korean population. The remarkable success of KHI can be compared with other OECD countries which had taken some 30 years to over 100 years to establish the total coverage of the population. In the year of 2005, Korean people enjoyed 14.1 times of ambulatory visits in a year, which is one of the highest levels in OECD countries. Life expectancy at birth and the infant mortality rate in Korea in 2005 both surpassed the average figures of the OECD countries, The main reason for the success of KHI can be delineated with the three characteristics in KHI development ; low premiums, low benefits, and low fee-schedule charges. However, these three characteristics of KHI, which had been the key for the rapid development of the system, have become tremendous drawbacks for the secure development of KHI. The dissatisfaction and discontent of health care providers are ever increasing. The population is reluctant to pay more premiums though it seems essential for the better care coverage. The health care system has been heavily distorted toward high technologyoriented expensive care. There should be several factors seriously tackled for the secure development of KHI in the future. The Korean society is anticipating an unprecedently rapid increase of the elderly population. The consumers' expectation toward higher quality of care is ever increasing. The growth rate of Korean economy is lower than it used to be. All these factors critically affect sustainable development of KHI in the future.