The financial status of the National Health Insurance recorded a surplus for the fourth consecutive year, reporting a surplus of 1.7244 trillion won last year. The cumulative reserves have nearly reached an all-time high of 30 trillion won. According to the National Health Insurance Corporation, the cash flow-based health insurance financial status for 2024 revealed this data. Last year, health insurance revenues were 99.087 trillion won, while expenditures were 97.3626 trillion won.
The operating surplus has consistently posted surpluses, with 2.8 trillion won in 2021, 3.6 trillion won in 2022, and 4.1 trillion won in 2023. Despite a freeze in health insurance premiums and reduced premium burdens for local subscribers leading to a halving in premium revenue growth to 3.0% compared to the previous year’s 6.5% increase, expenditures rose. The increase in insurance benefit costs reached 7.3%, up 0.5 percentage points from the previous year’s 6.8%, following support for the emergency medical system after conflicts between the medical community and the government.
Despite these structural factors, the corporation highlighted the achievement of accumulating the largest historical cumulative reserves and maintaining a stable financial capacity with the fourth consecutive surplus. Accumulated reserves exceeded 20 trillion won in 2021 and increased to 28 trillion won the following year, reaching a historic high of 29.7221 trillion won in the previous year.
Looking more closely, total revenue increased by 4.1757 trillion won (4.4%) compared to the previous year. Although the increase in premium revenue was limited to 3% (2.434 trillion won), it was offset by government support. Workplace premiums rose by 3.8% due to a slowdown in nominal wage growth, while local premiums decreased by 3.1% compared to the previous year following the real estate premium basic deduction expansion (from 50 million won to 100 million won) and the abolition of car insurance premiums implemented last February.
However, government support expanded by 1.1956 trillion won from the previous year to 12.2 trillion won (10.3 trillion won from the general account and 1.9 trillion won from the health promotion fund), creating a cash income of 8.3 trillion won amid interest income exceeding the target yield by 1.36 percentage points at 4.79% (provisional).
Total expenditures increased by 6.5789 trillion won (7.2%) compared to the previous year. The largest portion, insurance benefit costs, showed a decrease trend due to a mass departure of residents from training hospitals in protest over medical school expansions last February. However, significant costs were incurred to fill their vacancies, such as salaries and increased fees for severe and emergency care to support the emergency medical system.
The government has been investing around 189 billion won of public health insurance funds monthly since last March to maintain emergency medical care. By the end of last November, accumulated support for emergency medical care totaled approximately 1.26 trillion won.
To maintain operations in 74 training hospitals facing management difficulties, prepayments of up to 30% of benefit costs were made. Additionally, to ensure the response capacity of advanced general hospitals where a significant portion of doctors are residents, general hospitals were actively utilized.
Accordingly, insurance benefit costs for advanced general hospitals decreased by 8.2% compared to the previous year, while general hospitals and clinics showed an increase in benefit costs of 6.6%, 7.6%, and 6.0% respectively.
NHIC plans to carry out tasks related to the second comprehensive health insurance plan (2024-2028) and the first medical reform implementation plan, such as supporting essential medical care and transitioning the structure of advanced general hospitals, based on stable health insurance finances.
Furthermore, the corporation emphasized continuous efforts to promote rational medical use, adjust excessive medical service supply, and provide optimal and appropriate care to ensure financial sustainability and efficient resource management.
Jeong Ki-seok, chairman of NHIC, stated, “The mid-to-long-term financial outlook is not expected to be favorable due to demographic changes and economic uncertainties,” adding, “We plan to maintain sound insurance finances through proactive expenditure rationalization efforts, such as preventing financial leaks, and improving to a transparent and trustworthy management and operation system.”