South Korea: Government cracks down on health insurance fraud

| 07 Mar 2023

The Ministry of Health and Welfare has indicated significant changes to the country's health insurance payment standards in a bid to improve financial stability and prevent fraud.

The measures were revealed during the 3rd Health Insurance Policy Deliberation Committee recently, with the vice minister stating that the aim was to provide high-quality healthcare while preventing financial losses. 

To achieve this, the health ministry plans to strengthen the standards for health insurance benefits applied during magnetic resonance imaging (MRI) and ultrasound tests. 

The use of these tests has soared in recent years, leading the government to review payment standards and limit payments to essential items only.

In addition, the ministry is seeking to eradicate the practice of “medical shopping,” which involves excessive overuse of healthcare services by taking advantage of low co-pays in the insurance coverage system. 

To combat this, the government will raise the co-pay rate to 90% for individuals who visit a medical institution more than 365 times a year and receive outpatient treatment.

Currently, typical deductibles are around 20% after health insurance is applied. 

The eligibility requirements for the families of foreign enrollees will also be strengthened following the “dine and dash” controversy, where foreigners entered the country, joined as dependents through their Korean family members, and left the country after receiving treatment. 

Under the new rules, foreigners or long-term overseas residents will not be able to receive health insurance benefits until six months after entering the country, and nursing institutions will be required to identify patients to prevent personal information theft. 

The ministry plans to strengthen the re-evaluation of drug costs, which have been increasing by approximately 1 trillion won (US$853 million) every year, and apply various risk-sharing systems. 

The second comprehensive health insurance plan is set to be announced in September, with structural reforms aimed at securing long-term financial soundness, reported The Korea Bizwire.