Person A underwent cataract surgery at an eye clinic in Gangnam, Seoul, in Jan. 2023. At the time, Person A worried about the expensive treatment cost, but the hospital director said there would be no burden because Person A could receive indemnity insurance benefits. Although the insurer was filing lawsuits to avoid paying, the hospital director said, "If it goes to a lawsuit, we win 100%." Trusting this, Person A had the surgery and paid 12 million won. However, the insurer paid only 600,000 won.
The clinic was the eye hospital that appears in a precedent in which the patient ultimately lost a cataract insurance lawsuit in 2022. Even though a patient who had surgery with the hospital director had already lost an insurance-benefit lawsuit against the insurer, the director recommended surgery to another patient, saying they could receive insurance benefits. Moreover, this precedent has been used as a key basis for insurers to pay only part of cataract insurance benefits. Person A learned this belatedly and questioned the hospital, but the hospital reportedly said it did not know about the precedent. In the end, Person A is proceeding with the insurance lawsuit alone.
There is criticism that hospitals recommend expensive treatments saying patients can receive insurance benefits, while insurers refuse to pay claiming overtreatment, leaving only the patients caught in the middle to suffer losses. Such cases have been recurring from manual therapy to play therapy, cataract surgery, and recently knee injections.
According to the insurance industry on the 28th, as insurers expected the insurance benefits paid due to cataract surgery to rise from 648 billion won in 2020 to 1.1528 trillion won the following year, they tightened their claims reviews. Indemnity insurance compensates about 250,000 won for outpatient treatment, while hospitalization is covered up to 50 million won. Insurers began paying only hospitalization or outpatient treatment costs, arguing that cataract surgery does not require hospitalization unless special complications or side effects occur immediately after surgery.
As consumers who did not receive insurance benefits filed lawsuits, controversy arose when the Supreme Court dismissed a related case without a hearing in June 2022. The Seoul High Court ruled for the insurer in a lawsuit for confirmation of nonexistence of debt to claw back insurance benefits paid to a patient, and the Supreme Court dismissed the appeal without a separate hearing. Insurers have relied on this precedent to pay only part of cataract insurance benefits.
Meanwhile, as in Person A's case, some hospitals still recommended surgery, saying patients could receive insurance benefits. They argued that a dismissal without a hearing is not a Supreme Court precedent with binding force because it was issued without reviewing the main issues. However, in Jan., the Supreme Court ruled for the insurer in a similar case, and lower courts have begun tilting toward insurer victories.
Patients who underwent expensive surgery expecting to receive insurance benefits have ended up bearing treatment costs and even spending on litigation. Because these are health-related issues, patients want to receive sufficient treatment at hospitals reputed to be skilled even if the costs are high. When a hospital recommends costly treatment saying indemnity insurance benefits will reduce the burden, it is hard to refuse.
Person A said, "Fearing that cataract surgery could really lead to blindness, I had an unfounded perception that a Gangnam eye clinic would be trustworthy," and added, "When the hospital director said 'you can receive insurance benefits,' I think that made me decide to have the surgery there."
Hospitals are exploiting gaps in indemnity insurance to profit from insurance benefits, and insurers are repeatedly tightening reviews to prevent benefit leakage. Manual therapy remains a major dispute, and the insurance dispute over developmental therapy that began during the COVID-19 period has not ended. Recently, disputes over insurance benefits for bone marrow knee injections have increased to the point that the Financial Supervisory Service issued a consumer alert of "caution."