Medical cost trends under national health insurance benefit extension in Republic of Korea

Jinha An and Sukil Kim

International Journal of Health Planning and Management, 2020, vol. 35, issue 6, 1351-1370

Abstract: This study examines whether the burden of medical expenses on households has gradually decreased since South Korea began implementing benefit expansion policies to strengthen health insurance coverage. Using Korea's Household Income & Expenditure Survey from 1995 to 2014, the annual average monthly household expenditures and the catastrophic health expenditure (CHE) indicator were analyzed. The latter is an indicator of household impoverishment resulting from out‐of‐pocket healthcare expenditures exceeding a defined threshold proportion of the household's income. Through descriptive and frequency data analyses and using P‐values, the annual trends and differences in absolute values and share of CHE prevalence across households were measured. The study finds that the proportion of income spent on medical expenses increased from 2.47% (1995) to 4.94% (2014) on average. CHE also increased 3.6 times, 6.3 times, 9.8 times, and 11.1 times for assumed threshold sizes of 10%, 20%, 30%, and 40%, respectively. The lowest income group had the highest increase in CHE incidence. These results suggest that the benefit extension policy has lowered medical use thresholds and led to an increase in medical resource use. Therefore, the Ministries of Health and Welfare, and of Economy and Finance should collaborate to design policies for vulnerable groups.

Date: 2020
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