[Editor's note] The health insurance system, a social safety net that eases people's medical costs, was first implemented in 1977. It gradually expanded its coverage and achieved a universal health insurance framework in 1989. The scope of coverage has repeatedly widened to include ward fees, MRIs, and ultrasounds. But concerns over the growing fiscal burden and equity have also increased. We examined the key issues surrounding the health insurance system and the pros and cons of expanding coverage.
President Lee Jae-myung, calling hair loss "a matter of survival" during a Health and Welfare Ministry briefing, ordered a review of expanding health insurance coverage, intensifying the debate over reimbursing hair loss treatment.
According to health authorities on the 22nd, following the president's directive to review "hair loss reimbursement," the Health and Welfare Ministry also began its review. The ministry said it is comprehensively considering ways to ensure that necessary support, including for hair loss, can be provided to young people who have faithfully paid their premiums.
A ministry official said, "Along with reviewing expanded reimbursement for hair loss treatment, we also plan to examine measures to reduce health insurance spending, such as adjusting compensated fees for mild conditions and managing overuse of medical services."
But criticism is growing among experts in the medical community.
Critics say reimbursing hair loss will not only increase the fiscal burden on health insurance but also shake the principle of a health insurance system centered on "serious illnesses and disease treatment."
Cancer patients and those with rare diseases who are waiting for expensive new drugs to be reimbursed also say it violates fairness.
◇ "If hair loss is reimbursed, the fiscal burden is at least 1 trillion to 3.6 trillion won"
Currently, health insurance coverage for hair loss treatment is limited to conditions such as "alopecia areata," an autoimmune disease, and "seborrheic dermatitis." Hair loss caused by genetic factors or aging is categorized as "nonreimbursed" because it is considered more cosmetic than therapeutic.
Korea's hair loss population is about 10 million. With more young people with hair loss experiencing psychological and economic burdens in job hunting and social life, some argue the scope of health insurance benefits should be expanded.
While the president's description of hair loss as a "survival issue" is interpreted as reflecting this context, counterarguments are mounting.
The biggest problem is funding. According to the Health Insurance Review & Assessment Service (HIRA), total medical expenses for alopecia in 2024 came to 38,954,120,000 won. This includes medical costs such as consultation and test fees.
According to the National Health Insurance Service, 1,115,882 patients received treatment for alopecia over the past five years from 2020 through June last year, with health insurance medical expenses totaling 191 billion won during that period. The number of patients treated for hair loss last year alone was 237,617, up about 14% from 208,601 in 2015, 10 years earlier. This figure excludes those with hair loss due to genetic factors or aging.
One estimate says that even if only half of the total hair loss population is included as beneficiaries, an additional annual budget of around 1 trillion won would be needed.
Kim Jae-yeon, legal director of the Korean Medical Association Organization, said, "If we factor in the demand expansion effect from reimbursement, annual fiscal expenditure from reimbursing treatments for hereditary hair loss could increase from at least 1 trillion won to as much as 3.6 trillion won."
Kim said, "Some estimates lack realism in claiming the state's additional burden would be limited to 100 billion won a year if reimbursement is introduced, based on the hair loss drug market size of about 120 billion won." In other words, the fiscal burden could grow beyond that.
Even assuming that 3.33 million people, one-third of Korea's 10 million with hair loss, visit hospitals after reimbursement begins, the total would reach around 1 trillion won.
In the current nonreimbursed market, the monthly average price of major hair loss treatments—finasteride, dutasteride, and minoxidil—averages 20,000 to 50,000 won depending on the product. Even at 35,000 won, the annual drug cost per patient is 420,000 won.
It typically takes three to six months for hair loss treatment to show results after taking medication, and it tends to progress again if treatment stops. In other words, once it falls within coverage, it becomes a "fixed spending source," not a one-time support.
If health insurance applies and the usual health insurance burden ratio of 70% (30% patient copay) is used, the drug cost the state would have to pay per patient from the health insurance budget would be about 294,000 won a year, and it would be about 979 billion won even if only 3.33 million people enter the system. This figure reflects only drug costs, excluding consultation and test fees. Considering additional potential demand, some estimate the actual fiscal burden could easily exceed the 2 trillion to 3 trillion won range.
Jung Hyung-seon, a professor in the Department of Health Administration at Yonsei University, said, "Hair loss straddles therapeutic and cosmetic purposes, making it very hard to draw a line, and it is a condition with a heavy fiscal burden," adding, "We must determine the scope of coverage, the size of public funding, and the copay rate, and even if pursued, substantial time will be needed for the research and review to support it."
Health and Welfare Minister Jung Eun-kyeong also said, "I think reimbursing hair loss would have a significant impact on the health insurance budget."
With aging and low birthrates, the sustainability issue of health insurance has already surfaced. As of this year, cumulative health insurance reserves total about 30 trillion won. Last year, health insurance posted total revenue of 99,087 billion won and total expenditure of 97,362.6 billion won, for a surplus of 1,724.4 billion won, but it is forecast to swing to a deficit starting next year and to exhaust cumulative reserves by 2030.
◇ "Shakes the principles of the health insurance system"… criticism of populism too
Among experts, many effectively opposed expanding reimbursement for hair loss. The main reason was that hair loss is not a disease that requires intervention with public funds.
Heo Yoon-jung, a professor at Dankook University Hospital's Regional Trauma Center and an intensivist, said, "Hair loss does not threaten life or bodily functions," adding, "The principle of the health insurance system is to prioritize diseases directly tied to life, and this shakes that principle."
The Korean Medical Association Organization, a physicians' group, also said, "It is questionable whether hair loss should be prioritized for reimbursement," adding, "Prioritizing stronger coverage for serious and rare diseases aligns with the basic principles of health insurance."
There was also mounting criticism that hair loss became the priority topic in reimbursement discussions simply because of a presidential directive, violating fairness.
A hematology-oncology specialist who requested anonymity criticized, "The president's directive to review reimbursement for hair loss is hurtful to many families of patients with serious diseases and medical staff who have appealed to the National Assembly for reimbursement." The specialist said, "There are still many drugs we cannot use because they are nonreimbursed despite being effective," adding, "Even the expense of genomic testing needed for ovarian cancer patients is still nonreimbursed."
An official with the Korea Alliance of Patients with Rare and Incurable Diseases, a patient group, said, "Health insurance already applies to treatment for pathological hair loss," adding, "There are many other serious diseases for which health insurance coverage is desperately needed, including infants and toddlers born with rare and intractable diseases."
Criticism also followed that the debate over reimbursing hair loss is moving too quickly.
A university hospital professor called it "populism," adding, "It's a comedy that the president orders reimbursement for hair loss during a live-streamed policy briefing, the ministry then launches a review, and the chairperson of the National Assembly's Health and Welfare Committee—who should scrutinize and keep the government's health policy in check—publicly welcomes hair loss reimbursement."
The professor said, "Because the health insurance budget is limited, if hair loss is included in coverage, medical resources for other disease areas will be reduced or pushed back from opportunities for reimbursement."