Health Policy Monitor
Skip Navigation

Extension of Benefit Coverage and its Roadmap

Country: 
Südkorea
Partner Institute: 
Department of Health Policy and Management, School of Public Health, Seoul National University
Survey no: 
(6)2005
Author(s): 
Soonman KWON
Health Policy Issues: 
Leistungskatalog
Current Process Stages
Idee Pilotprojekt Strategiepapier Gesetzgebung Umsetzung Evaluation Veränderung/Richtungswechsel
Implemented in this survey? ja nein nein nein ja nein nein
Featured in half-yearly report: G-politik in Industrieländern 6

Abstract

Ministry of Health and Welfare formulated the roadmap to increase the benefit coverage. Starting in September 2005, MOHW reduces the co-payment and extend the coverage to previously uncovered drugs or tests for the patients of cancer, open heart surgery, and open cranial surgery in order to reduce the financial burden of those patients by 30%. MOHW plans to extend the target illness for the reduction of patient financial burden, from 3 in 2005 to 10 by 2008.

Purpose of health policy or idea

Out-of-pocket payment at the point of service has been still high, about 40%, due to rather limited benefit coverage in the national health insurance (single payer, social health insurance with universal coverage of population) of Korea. Because some essential and medically necessary services are not covered by health insurance, financial burden on patients can be huge, and the national health insurance has been often criticized that it fails to provide sufficient financial protection to the insured.

In the past, the process of the extension of health insurance benefit coverage has been incremental based solely on the financial concern of the insurer. The new policy aims to extend the benefit coverage by providing its roadmap based on priority setting, public hearings and consensus building. The extension of benefit coverage is expected to ease the financial burden of patients and minimize the catastrophic effect of illness on households.

Main points

Main objectives

To provide better financial protection to the insured.

Type of incentives

Financial

Groups affected

Patients and consumers, Providers to some extent

 Suchhilfe

Characteristics of this policy

Innovationsgrad traditionell recht innovativ innovativ
Kontroversität unumstritten unumstritten kontrovers
Strukturelle Wirkung marginal recht fundamental fundamental
Medienpräsenz sehr gering sehr hoch sehr hoch
Übertragbarkeit sehr systemabhängig recht systemneutral systemneutral

Political and economic background

Purpose and process analysis

Current Process Stages

Idee Pilotprojekt Strategiepapier Gesetzgebung Umsetzung Evaluation Veränderung/Richtungswechsel
Implemented in this survey? ja nein nein nein ja nein nein

Origins of health policy idea

For a long time, there has been a consensus that the benefit coverage of national health insurance is limited, and financial burden of patients is still high. However, there has been little discussion on the long-term vision and strategy to extend the benefit coverage.  

Ministry of Health and Welfare (MOHW) and National Health Insurance Corporation (NHIC) decided to formulate the roadmap to increase the average benefit coverage rate (in terms of health care expense) from the current level of 61% to 70% by 2008. In Feb 2005, Task Force of Health Insurance Reform was established in the MOHW to work on the roadmap and implement necessary policy measures to achieve the goal.

Initiators of idea/main actors

  • Regierung

Approach of idea

The approach of the idea is described as:
renewed:

Actors and positions

Description of actors and their positions
Regierung
Ministry of Health an Welfaresehr unterstützendsehr unterstützend stark dagegen
National Health Insurance Corporationsehr unterstützendsehr unterstützend stark dagegen
Consumerssehr unterstützendsehr unterstützend stark dagegen

Actors and influence

Description of actors and their influence

Regierung
Ministry of Health an Welfaresehr großsehr groß kein
National Health Insurance Corporationsehr großgroß kein
Consumerssehr großgroß kein
National Health Insurance Corporation, ConsumersMinistry of Health an Welfare

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

Expert surveys and meetings were used to prioritize medical services for the purpose of extending the benefit coverage. To measure the size of out-of-pocket payment of patients at the point of service, the task force performed a detailed survey of patient burden for uncovered services in 5 general hospitals. Because insurance claims do not include information on patient payment for uncovered services, patient surveys are required to measure the total out-of-pocket payment of patients at the point of service. It was estimated that health insurance payed only about 50% of total medical expense for cancer patients. It was smaller than the average benefit coverage rate, 60%, because cancer patients use many new and expensive drugs and services that are not currently covered by health insurance.

Based on the survey and prioritization by experts, MOHW decieded to reduce the financial burden of the patients of 3 types of illness (often leading to catastrophic medical expenses) by 30%, starting September 2005. MOHW will reduce the copayment and extend the coverage to previusly uncovered drugs or tests for the patients of cancer, open heart surgery, and open cranial surgery in oredr to achieve the targeted reduction of financial burden of patients. About 330,000 patients are estimated to benefit from the new policy. MOHW plans to extend the target illness for the reduction of patient financial burden, from 3 in 2005 to 10 by 2008.

Expected outcome

There were no active opponents to the extension of benefit coverage of the national health insurance. And the extension based on long-term roadmap and prioritising is an improvement, compared with the previous approach of piece-meal extension based on short-term fiscal considerations. 

Nonetheless, recent fiscal surplus of the national health insurance has contributed to opening the window of opportunity. However, fiscal resources will still be the key factor to the sustainability of the MOHW's long-term plan to extend benefit coverage. 

Because the policy is applied to 3 illnesses in 2005, patients with similar financial burden but from illnesses other than cancer, open heart surgery, and open cranial surgery, cannot benefit from the policy, and equity issue can be a concern. Although those 3 illnesses are typical types that are asscoiated with catastrophic medical expense, there are still other illnesses with huge financial burden on patients. 

One of the drivers of the high out-of-pocket payment at the point of service is that providers increasingly provide more and more of new technology and drugs, which results not only from the slowness of the government to include new technology in the benefit coverage, but also from the trend that Korean physicians are indeed very early adopters of new technology. At the same time, providers can charge market price for those uncovered services whereas government strictly regulates the fees for covered services. In the future, government also needs to consider extending benefit coverage based on rigorous economic evaluation or cost-effectiveness analysis.

Impact of this policy

Qualität kaum Einfluss neutral starker Einfluss
Gerechtigkeit System weniger gerecht System gerechter System gerechter
Kosteneffizienz sehr gering neutral sehr hoch

References

Sources of Information

www.mohw.go.kr

www.nhic.or.kr

Author/s and/or contributors to this survey

Soonman KWON

Empfohlene Zitierweise für diesen Online-Artikel:

Soonman KWON. "Extension of Benefit Coverage and its Roadmap". Health Policy Monitor, October 2005. Available at http://www.hpm.org/survey/rok/a6/1