How public and private health insurance coverage mitigates catastrophic health expenditures in Republic of Korea

Hyun Woo Jung; Young Dae Kwon; Jin-Won Noh

doi:10.1186/s12913-022-08405-4

How public and private health insurance coverage mitigates catastrophic health expenditures in Republic of Korea

BMC Health Serv Res. 2022 Aug 16;22(1):1042. doi: 10.1186/s12913-022-08405-4.

Authors

Hyun Woo Jung¹, Young Dae Kwon², Jin-Won Noh³

Affiliations

¹ Department of Health Administration, Graduate School·BK21 Graduate program of developing glocal experts in health policy and management, Yonsei University, Wonju, Republic of Korea.
² Department of Humanities and Social Medicine, College of Medicine and Catholic Institute for Healthcare Management, The Catholic University of Korea, Seoul, Republic of Korea.
³ Division of Health Administration, College of Software and Digital Healthcare Convergence, Yonsei University, 1, Yeonsedae-gil, Heungeop-myeon, Wonju-si, Gangwon-do, 26493, Republic of Korea. jinwon.noh@gmail.com.

Abstract

Background: The private health insurance (PHI) market in Republic of Korea has instituted indemnity insurance plans that provide partial reimbursements for some medical services or costs that are not covered by the National Health Insurance (NHI). To date, no study has estimated the extent to which PHI coverage lowers the economic burden of households' access to health care. The current study aims to evaluate the design of Korea's PHI system in terms of coverage using a catastrophic health expenditure (CHE) indicator and compare it with NHI.

Methods: This study determined the difference between the number of households that were subscribed to PHI and those that received reimbursements from PHI. Additionally, it compared the effects of reduced CHE by NHI benefits with PHI reimbursements. Furthermore, it compared PHI reimbursements based on income class. Finally, it analyzed the contribution of NHI and PHI to CHE reduction through a two-part model with hierarchical regression.

Results: The results indicated that of the 5644 households examined, 3769 subscribed to PHI, but only 246 households received reimbursements. Notably, NHI reduced CHE incidence by 15.17%, whereas PHI only reduced CHE by 1.22%. The NHI scheme indicated reduced inequality as it provided more benefits to the low-income class for their used medical services, whereas PHI paid more reimbursements to the high-income class. Accordingly, NHI coverage has protected households from CHE and improved equality to some extent; however, PHI coverage has had a relatively low effect on relieving CHE and has increased inequality.

Conclusions: The indemnity health insurance plans of PHI companies in Korea only cover partial medical costs or services, and so, most patients do not receive reimbursements. Thus, Korea's PHI system needs to improve to provide benefits to patients more generously and alleviate their financial burden.

Keywords: Catastrophic health expenditure; Insurance coverage; Private health insurance; National health insurance; Republic of Korea.

MeSH terms

Catastrophic Illness
Health Expenditures*
Humans
Insurance Coverage
Insurance, Health*
National Health Programs
Republic of Korea