A bill to make the government comply with the legally mandated standard for state support to the national health insurance has been submitted to the National Assembly. While premiums rise every year, state support has repeatedly fallen short of the legal standard on grounds of "fiscal conditions," pushing the cumulative unpaid amount to more than 20 trillion won.
Insufficient state support is not the only cause of the worsening finances, but observers note it is hard to discuss the long-term sustainability of the national health insurance in a structure where even the minimum state responsibility set out in law is not being fulfilled.
◇Using settlement of account instead of estimates…overhauling the calculation method for state support
On the 2nd, lawmaker Jeon Jin-sook of the Democratic Party of Korea separately introduced amendments to the National Health Insurance Act and the National Health Promotion Act. The core is to revise the calculation standard that determines the government's share of the national health insurance finances.
Current law requires calculating the size of government support based on "premium revenue expected to be collected in the year." Formally, the statutory ratio has been applied to this standard, but because expected revenue has been estimated conservatively each year, actual budgets have repeatedly reduced state support. The amendment would change this to "premium revenue in the settlement of account two years prior," so the government's burden is calculated using figures already finalized.
The support ratios are also specified in law. The amendment to the National Health Insurance Act sets support at 20% of premium revenue based on the settlement of account two years prior, and the amendment to the National Health Promotion Act sets support at 6% on the same basis. Combined, the government's support ratio for national health insurance finances is 26%.
The amendment to the National Health Insurance Act also removes the sunset clause attached to state support. The intent is to make clear that this is an ongoing fiscal obligation the government must shoulder, not a temporary provision subject to periodic extension.
A bill with a similar intent is already pending in the National Assembly. A representative example is the amendment introduced last year by lawmaker Jeong Chun-sook of the Democratic Party of Korea. While Jeong's bill focused on improving the calculation standard and the sunset clause, Jeon's bill more strongly seeks to constrain the government's discretion in the budgeting process by fixing the support ratio and calculation method directly in law.
◇Falling short becomes routine…21 trillion won unpaid over 17 years
The renewed push to amend the law is driven by the reality that shortfalls in state support have been repeated annually. According to the Ministry of Health and Welfare, national health insurance premium revenue in 2024 was 83.952 trillion won. Government support under the statutory standard was 13.8051 trillion won, but the actual payment was 12.1658 trillion won, a shortfall of 1.6393 trillion won.
Current law stipulates that the government support 20% of expected health insurance premium revenue, of which 14% comes from the general account and 6% from the Health Promotion Fund financed by tobacco charges. However, state support has remained in the low-10% range each year, falling short of the legal standard.
Except for 2019, in recent years the government's expected premium revenue has been set lower than the actual, resulting in reduced support even when applying the statutory ratio. Critics say this practice became entrenched because variables such as economic growth or increased medical use were not sufficiently reflected, with estimates centered on the premium hike rate.
The Health Promotion Fund is also a limiting factor. Due to a rule capping it at 65% of tobacco charge revenue, critics say its capacity to support is constrained, contrary to its original purpose of stabilizing national health insurance finances.
From 2007 to 2024, the amount the government should have supported under the legal standard totals 149.7617 trillion won, but the actual support was 128.0332 trillion won. The cumulative unpaid amount over this period is 21.7 trillion won.
This year as well, about 12.7 trillion won—around 14% of the roughly 90.9 trillion won in expected premium revenue—is slated to be supported from the state treasury. That is a slight increase from the previous year (about 12.6 trillion won), but still falls short of the statutory ratio.
◇Subscriber burden rises but finances flash warning lights…"Premiums alone have limits"
Subscriber burdens have risen over the long term. This year's national health insurance premium rate increased 1.48%, adding an average of 2,235 won per month for workplace subscribers and 1,280 won for community subscribers. While the premium rate was frozen in some years, the average burden has steadily increased.
Accordingly, health insurance premium revenue is expected to increase by 5.2844 trillion won from 87.7118 trillion won last year to 92.9962 trillion won this year. According to the National Health Insurance Service, premium revenue will grow by more than 16 trillion won over the four years since 2022.
Even so, the Ministry of Economy and Finance's Third Long-term Fiscal Outlook (2025–2065) projects that if the current structure remains, the national health insurance will swing into deficit in 2025 and will exhaust its cumulative reserves by 2033.
Experts draw a line at the idea that expanding state support is a cure-all for the worsening finances. Still, they commonly point out that discussions on expenditure control or institutional reforms are unlikely to be persuasive when even the legally specified support standard is not observed. State support is closer to a prerequisite to ease a structure that shifts the burden solely through premium hikes, rather than a prescription that instantly resolves the fiscal crisis.
The Ministry of Health and Welfare emphasizes the limits of fiscal conditions. Kim Han-suk, director of the ministry's health insurance policy division, said, "There are many other areas where national finances must be spent, so we have no choice but to consider various conditions comprehensively," adding, "We have tried to increase state support, even if only a little, every year."
The medical community sees the prolonged shortfall in state support as shifting the burden onto premium hikes. In particular, critics say the protective function of national health insurance may not work adequately for low-income groups vulnerable to premium increases or households facing catastrophic medical expenses.
Lee Eun-hye, a professor of radiology at Soonchunhyang University Bucheon Hospital, said, "An increase in state support does not automatically solve every problem," but added, "Unless need-based allocation and expenditure priorities are observed together, long-term fiscal instability and unequal household burdens will inevitably continue even with legally mandated state support."
Lee added, "France, Germany and the Netherlands manage their finances stably by operating state support, premium adjustments and expenditure control mechanisms together," and "to uphold the basic principles of social insurance, the starting point for Korea is to consistently implement at least the legally mandated standard for state support."