Financial authorities have wrapped up regulatory changes to launch the "fifth-generation indemnity health insurance," which will lower premiums while scaling back some non-reimbursable coverage. As a result, the fifth-generation indemnity product is expected to launch in April.
According to the financial sector on the 6th, financial authorities recently convened an internal regulation review committee and approved amendments to the Insurance Business Supervisory Regulations to introduce the fifth-generation indemnity plan. The amendments divide non-reimbursable medical costs into "severe (special rider 1)" and "non-severe (special rider 2)," and link the outpatient coinsurance rate to the National Health Insurance copayment rate.
The core of the fifth-generation indemnity plan is to differentiate coverage by classifying reimbursable items as "severe" and "non-severe." The aim is to strengthen coverage for severe diseases and curb overtreatment for mild illnesses. Diseases subject to the special calculation program, such as cancer, heart disease, cerebrovascular disease, and rare and intractable diseases, are classified as severe non-reimbursable and will continue to be covered up to 50 million won per year, the same as before. A new annual out-of-pocket cap of 5 million won is introduced for hospitalizations at tertiary general hospitals or general hospitals to reduce the burden of high treatment costs.
Manual therapy, extracorporeal shock wave therapy, and some non-reimbursable injections will be classified as "non-severe." The coinsurance rate for this category will be raised from the current 30% to as high as 50%, and compensation will be capped at 10 million won per year. The goal is to curb excessive use of non-severe, non-reimbursable procedures cited as a cause of premium leakage.
Reimbursable medical costs covered by National Health Insurance will also be split into "inpatient" and "outpatient," with different coverage limits. Inpatient care will keep the same 20% coinsurance as the current fourth-generation indemnity plan. In contrast, the outpatient coinsurance rate will be a minimum of 20% but will be raised in line with the National Health Insurance copayment rate. The current outpatient copayment rates are 30% for neighborhood clinics, 40% for hospitals, 50% for general hospitals, and 60% for tertiary general hospitals. If a 1 million won bill is charged at a tertiary general hospital, the patient's share will increase from the current 200,000 won to 600,000 won.
With the regulatory amendments for the fifth-generation indemnity plan passing the financial authorities' regulation review committee, the product is expected to launch in April.