'Holiday Filial Piety Gifts' 10 Trillion Won in Actual Expense Insurance Claims Leak Due to Cataract Surgery

[Asia Economy Reporter Oh Hyung-gil] "There has been a noticeable increase in children preparing meaningful holiday gifts for their parents, such as health checkups or cataract surgery." Recently, a well-known ophthalmology clinic has been increasingly recommending cataract surgery as a filial gift for parents. They even openly solicit patients by saying that if they have insurance, they can undergo surgery without any financial burden.

As cataract surgeries have surged rapidly, the insurance payouts for cataract surgery under indemnity insurance are expected to exceed 1 trillion KRW within this year. The recent sharp increase in indemnity insurance payouts for cataract surgery is cited as a typical case where non-reimbursable items are not being properly managed.

According to the report "Current Status and Challenges of Indemnity Medical Insurance Payouts for Cataract Surgery" published by Jeong Seong-hee and Moon Hye-jung, researchers at the Korea Insurance Research Institute, insurance claims for cataract surgery this year are estimated to reach 1.1528 trillion KRW. This represents a 77.9% increase compared to last year's 648 billion KRW.

In the first half of the year, the total insurance payouts related to cataract surgery by 10 non-life insurance companies amounted to 481.3 billion KRW, a 58.2% increase compared to the same period last year.

Indemnity insurance payouts for cataract surgery were 77.9 billion KRW in 2016, rising sharply to 143.2 billion KRW in 2017, 255.3 billion KRW in 2018, and 430 billion KRW in 2019.

The proportion of cataract surgery payouts within total indemnity insurance payouts by non-life insurers increased 4.8 times over four years, from 1.4% in 2016 to 6.8% in 2020. This is a very high growth rate considering that indemnity insurance payouts by non-life insurers increased by an average of 70% annually from 2016 to 2020, and the number of cataract surgeries increased by about 10% each year.

Cataracts are a disease where the lens becomes cloudy with a grayish-white color, leading to decreased vision. Cataract surgery involves removing the clouded lens and replacing it with an artificial intraocular lens. Over 90% of indemnity insurance claims for cataract surgery are performed at clinics, and more than 80% of the total claimed amount consists of non-reimbursable items.

In particular, claims for indemnity insurance related to cataract surgery have arbitrarily changed in terms of claim items and amounts per item due to changes in related regulations.

Cataract surgery is subject to a fixed payment system, where patients pay a predetermined fixed amount for medical services such as tests, surgery, and medication provided during hospitalization, regardless of the type or amount of care, and cannot be charged additional non-reimbursable medical fees.

However, exceptions allow patients to be charged for non-reimbursable procedures (non-reimbursable tests such as ocular biometry) and treatment materials (multifocal lenses, i.e., accommodative intraocular lenses) designated and announced by the Minister of Health and Welfare.

As a result, since before January 2016, there has been an increase in cases where high-priced non-reimbursable multifocal lenses are used instead of the reimbursable monofocal lenses, and indemnity insurance claims are made accordingly.

After clarifying in the standard insurance terms from contracts starting January 2016 that costs for multifocal lenses are not covered, the price of multifocal lenses decreased, but non-reimbursable test fees rose sharply. The average price per non-reimbursable test was higher at clinics (260,000 KRW) than at tertiary hospitals (80,000 KRW), and even within the same medical institution, clinics showed the most severe price differences.

An industry insider from the non-life insurance sector pointed out, "The pattern of indemnity insurance claims related to cataract surgery is a typical example showing that despite non-reimbursable prices fluctuating arbitrarily and sharply with each regulatory change, the management system mechanism has not functioned properly."