The government has effectively suspended the push for a proportional medical aid system. Medical aid is a program in which the state guarantees medical expenses for low-income groups. The former government attempted to change the current system, in which medical aid beneficiaries pay a fixed amount, to a model where they pay a certain percentage to reduce the financial burden on health insurance.
According to the medical community on the 17th, the new government's stance has leaned toward the arguments of civic groups, leading the Ministry of Health and Welfare to withdraw the proportional medical aid system. Previously, the ministry decided to reform medical aid from a fixed amount system to a proportional system at the Central Committee for Living Security in July of last year.
Currently, medical aid beneficiaries pay 1,000 to 2,000 won for outpatient medical expenses and 500 won for pharmacy costs. The proportional system means that medical aid beneficiaries would pay an amount proportional to their medical and prescription expenses. The ministry planned a system where beneficiaries would pay 4 to 8% of the medical fee and 2% of the prescription cost.
Those who frequently visit hospitals and have total medical expenses and prescription costs exceeding 50,000 won in a month will receive a full refund for the excess amount. The ministry announced a legislative notice for the 'partial amendment bill of the Medical Aid Act' between the 5th and the 15th of last month, shortly after the presidential election.
The proportional medical aid system was scheduled to be implemented from October following the legislative notice, but with the new administration, the presidential office instructed the ministry to listen to civic group opinions. On the 10th, the ministry faced backlash during a meeting, stating that the burden of medical expenses on low-income individuals would increase. The ministry stated that 'the purpose is to maintain the medical aid system for those in need,' adding that '(the push for the proportional system) will no longer proceed.'
The proportional medical aid system currently applies the standards for mandatory supporters. The mandatory supporter criteria prevent beneficiaries from receiving aid if their parents, children, or spouse have certain income and assets. President Lee Jae-myung has pledged to abolish the mandatory supporter criteria, asserting that the state should be responsible for the basic lives of its citizens. In this context, there have been prevailing observations that it would be difficult to introduce the proportional medical aid system.
However, the withdrawal of the proportional medical aid system leaves financial issues unaddressed. According to the ministry, there are 1.56 million medical aid beneficiaries. Medical aid expenditures are projected to increase from 4.1 trillion won in 2007 to 23 trillion won by 2034. Medical aid is currently funded by both the national and local governments. A ministry official noted, 'We will maintain the fixed amount medical aid for now,' but stated, '(financial sustainability) is difficult to answer as no particular method has been finalized for reforming medical aid.'
Medical aid was introduced in 1977 to improve medical accessibility for low-income groups. Beneficiaries used hospitals and pharmacies for free, but began paying a fixed amount starting in 2007. The ministry is expected to continue dialogues with civic organizations to find a compromise.