'Again' Simplification of Indemnity Insurance Claims Loses Attention... Insurers Say "Frustrating"

Simplification Bill for Indemnity Insurance Claims Drifts for 12 Years

[Asia Economy Reporter Oh Hyung-gil] The review of the amendment to the Insurance Business Act to simplify claims for indemnity health insurance was once again postponed in the National Assembly due to opposition from the medical community.

The National Assembly's Political Affairs Committee held the 1st Bill Review Subcommittee on the 28th of last month and conducted a joint review of five partial amendments to the Insurance Business Act that would allow indemnity insurance subscribers to electronically request their medical institutions to send their medical records directly to insurance companies. However, it was decided to continue the review.

Previously, on June 20, the Political Affairs Committee had planned to jointly review the amendment in the Bill Subcommittee but excluded it from the review considering opposition from the medical community.

Computerization of indemnity insurance claims means that the insurance policyholder does not have to send the documents required for the insurance claim to the insurance company one by one, but the hospital directly transmits the electronic documents to the insurance company.

According to non-life insurance companies, out of a total of 79,444,000 indemnity insurance claims last year, only 91,000 were filed electronically, accounting for a mere 0.11%. The remaining approximately 79,353,000 claims were made by issuing paper documents through mail, visits, fax, and other methods.

The National Assembly's decision to continue the review is interpreted as being influenced by the medical community's calls for the amendment's withdrawal and other opposing voices.

Medical organizations such as the Korean Medical Association, the Hospital Association, the Korean Dental Association, the Korean Oriental Medicine Association, and the Korean Pharmaceutical Association have consistently pointed out problems with the amendment and issued a statement strongly opposing it on the 27th, the day before the Bill Subcommittee review.

The medical community is concerned that simplifying indemnity insurance claims could lead to medical privatization. They argue that personal medical information would accumulate in private insurance companies, eventually reducing medical institutions to subordinate contractors of private insurers.

In their statement, the medical organizations said, "In Korea, regulation and review of private medical insurance by health authorities have not been conducted, and it has only been regulated by financial authorities as a financial product, which has exacerbated side effects. In this situation, if the computerization of medical information and the accumulation of personal medical information by private insurance companies proceed, it will ultimately be the starting point of medical privatization."

They added, "The first step of medical privatization is the establishment of a system where private insurance companies have medical providers such as medical institutions as subordinate contractors and control them through fee contracts and review evaluations. Simplifying medical fee claims will accumulate personal medical information in private insurance companies and create databases, ultimately reducing medical institutions to subordinate contractors of private insurers."

However, the insurance industry dismisses these medical community claims as unfounded and excessive concerns. They argue that computerizing medical information that must already be submitted on paper will reduce consumer inconvenience.

They also established institutional measures to prevent the accumulation of new medical information on insurance subscribers or the use of such information for premium increases or restrictions on underwriting.

An insurance industry official said, "The Insurance Business Act includes provisions to prevent the leakage of personal medical information, such as obligations to use, store, and keep confidentiality, as well as penalties. The insurance premium increases and underwriting restrictions claimed by the medical community are legally impossible, and the information requested will only be at the level necessary for insurance claims."