The Projection of Medical Care Expenditure in View of Population Age Change

Yu, Seung Hum; Jung, Sang Hyuk; Nam, Jeung Mo; Oh, Hyohn Joo

Abstract

It is very important to estimate the future medical care expenditure, because medical care expenditure escalation is a big problem not only in the health industry but also in the Korean economy today. This study was designed to project the medical care expenditure in view of population age change. The data of this study were the population projection data based on National Census Data (1990) of the National Statistical Office and the Statistical Reports of the Korea Medical Insurance Corporation. The future medical care expenditure was eatimated by the regression model and the optional simulation model. The significant results are as follows; 1. The future medical care expenditure will be 3,963 billion Won in the year 2000, 4,483 billion Won in 2010, and 4,826 billion Won in 2020, based on the 1990 market price considering only the population age change. 2. The proportion of the total medical care expenditure in the elderly over 65 will be 10. 4% in 2000, 13.5% in 2010, and 16.9% in 2020. 3. The future medical care expenditure will be 4,306 billion Won in the year 2000, 5,1101 billion Won in 2010, and 5, 699 billion Won in 2020 based on the 1990 market price considering the age structure change and the change of the case-cost estimated by the regression model. 4. When we consider the age-structure change and inflation compared with the preceding year, the future medical care expenditurein 2020 will be 21 trillion Won based on a 5% inflation rate, 42 trillion Won based on a 7.5% inflation rate, and 84 trillion Won based on a 10% inflation rate. Consideration of the aged (65 years old and over)will be essential to understand the acute increase of medical care expenditure due to changes in age structure of the population. Therefore, alternative policies and programs for the caring of the aged should be further studied.