The government`s move to limit the coverage of private health insurance schemes is prompting resistance from local insurers who claim that the plan would only increase the cost burden on insurance policyholders.
In a statement issued yesterday, chief executives of life and nonlife insurance companies said that the government`s plan would only increase the burden on medical charges. Insurance companies also fear losing their sales network and thus their source of profits.
The industry insiders estimated patients would have to bear additional medical costs as much as 6.4 trillion won.
The number of private insurance policymakers is projected to be around 20 million, according to industry insiders.
The Ministry of Health and Welfare is considering limiting the coverage of private health insurance policies in areas otherwise not covered by the National Health Insurance. They include illnesses or injuries considered not affecting everyday working life, or procedures that require use of expensive equipment.
Under the ministry`s reform plan, the insurance companies would not be able to offer full coverage, but would only pay for mild ailments instead.
The national health care plan covers half of various ailments and procedures while the remaining half and non-serious illnesses must be paid for by the patients themselves.
The ministry officials claim that the present system where private health insurance policies give full coverage for areas not paid for by the government has created moral hazards and badly affected the financial soundness of the National Health Insurance.
Revamping the insurance industry-related system has become one of the government`s top priorities as rapid demographic changes has only worsened the financial health of the National Health Insurance.
Many industry experts urged the government to take more market-friendly approaches in dealing with the private insurance sector rather than impose additional regulations on the industry players. It is important to make both the public and private insurance scheme complement each other, experts said.
(firstname.lastname@example.org) By Kim Jung-min