Simplification of Indemnity Insurance Law Fails Again Due to Medical Sector Opposition... 'Consumer Convenience' Neglected for 10 Years

Insurance Companies and Consumer Groups Strongly Advocate for Simplified Claims Process of Real-World Insurance for Consumer Benefits
High Expectations from Ruling and Opposition Parties' Proposals, but Medical Community Opposition Causes Another Failure
National Assembly Suspends Review of Amendment Bill

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Legislation allowing hospitals to electronically claim indemnity medical insurance (indemnity insurance) benefits immediately after treatment has once again been blocked by opposition from the medical community. Although both ruling and opposition parties unanimously proposed the law amendment for consumer convenience, expectations for its passage were high this time, but it has stalled due to strong resistance from the medical sector. Critics point out that consumer benefits have been neglected for 10 years due to the powerful influence of the medical community's opposition.

According to the non-life insurance industry on the 3rd, the National Assembly's Legislation and Judiciary Committee's bill review subcommittee discussed partial amendments to the Insurance Business Act, which were respectively proposed by Assemblyman Ko Yong-jin of the Democratic Party of Korea and Assemblyman Yoon Chang-hyun of the People Power Party, but failed to reach an agreement.

This bill was prepared with the purpose of improving convenience and benefits for subscribers by allowing medical institutions to electronically claim insurance benefits upon request from indemnity insurance subscribers, and to drastically reduce the workload of the insurance industry.

According to previous research, as of 2018, 76% of the 90 million annual indemnity insurance claims were made based on paper documents through fax, insurance agents, or visits. Even when claims are submitted by photographing paper documents and sending them via insurance company applications (21%) or email (3%), the insurance company still has to manually input the data into the system, so in reality, 99% of claims are based on paper documents.

Efforts to reduce these costs and efforts were made in the 20th National Assembly to simplify indemnity insurance claims legislation, but they faced opposition from the medical community. The medical community is extremely negative about claim simplification, fearing that the Health Insurance Review and Assessment Service (HIRA) might inspect indemnity insurance data or review non-covered medical services that are not subject to health insurance.

The bill reintroduced by Assemblyman Ko added provisions to address medical community concerns by prohibiting HIRA from using or storing information for purposes other than document transmission, and allowing the formation of a committee involving the medical community related to transmission tasks.

Assemblyman Yoon Hyun also proposed a similar amendment to the Insurance Business Act, raising expectations for bipartisan agreement. Civic and consumer groups have consistently demanded claim simplification to enhance consumer convenience.

However, the medical community made every effort to block the bill's passage through the subcommittee. Dr. Choi Dae-jip, president of the Korean Medical Association, personally visited the National Assembly and contacted members of the Legislation and Judiciary Committee, presenting arguments against the amendment citing administrative burdens on medical institutions and the possibility of sensitive information leaks.

A National Assembly Legislation and Judiciary Committee official said, "Even the opposition party's floor leader and some ruling party members showed differing opinions," adding, "In the spirit of reaching a consensus, the Insurance Business Act amendment did not pass the bill review subcommittee." The official predicted, "Unless special circumstances arise, the indemnity insurance claim simplification bill is unlikely to be discussed again for the time being, and it may only be reconsidered in the latter half of the 21st National Assembly when committee assignments change."