[Health Insurance Premium Overhaul] 5.61 Million Regional Subscribers Pay 36,000 Won Less Monthly

Unified Deduction of 50 Million KRW on Property Tax Base; Vehicles Under 40 Million KRW Excluded from Taxation
Dependents with Annual Income Over 20 Million KRW to Switch to Regional Subscribers

[Image source=Yonhap News]

Health insurance premiums for regional subscribers will generally decrease. However, spouses and children who are dependents under workplace health insurance and have income exceeding 20 million won will be converted to regional subscribers and required to pay health insurance premiums starting this September. For workplace subscribers, if income outside of wages exceeds 20 million won, additional health insurance premiums will be imposed.

The Ministry of Health and Welfare announced on the 29th that it will publicly notify the amendment of the "Subordinate Legislation for Implementing the Second Phase Reform Plan of the Health Insurance Premium Imposition System" from the 30th until the 20th of next month, which includes these details.

This reform plan focuses on "transitioning to a rational and equitable premium imposition system where premiums are borne according to ability." To alleviate burdens on regional health insurance subscribers from factors other than income, a uniform deduction of 50 million won in property value (officially assessed price 83 million won, market price 120 million won) will be applied, and cars valued under 40 million won will be excluded from premium imposition.

Additionally, to resolve the issue where low-income regional subscribers were paying disproportionately high premiums relative to their income, the existing graded premium system will be abolished and a flat-rate system based on income will be introduced. The minimum premium threshold will also be expanded from an annual income of 1 million won or less to 3.36 million won or less.

To strengthen the principle of premium burden according to ability, the imposition criteria for income outside wages among workplace subscribers will be tightened from the current 34 million won to 20 million won, and the evaluation rate applied to income when calculating premiums will be raised from 30% to 50%. The income threshold for dependents under workplace subscribers will also be lowered from 34 million won to 20 million won annually.

According to the reform plan, among 8.59 million regional health insurance subscriber households, 65% (5.61 million households) will see their premiums decrease by 36,000 won, from 150,000 won to 114,000 won per month. Among workplace subscribers, 98% will experience no change in premiums, while the remaining 2%, about 450,000 people with income outside wages exceeding 20 million won annually, will see their premiums increase by 51,000 won on average, from 338,000 won to 389,000 won.

Lee Ki-il, the second vice minister of the Ministry of Health and Welfare, stated, "The implementation of this health insurance premium imposition system reform plan has been scheduled since 2017, and considering health insurance financial management such as fiscal projections, it can be implemented within the predicted financial scope." He added, "We expect that regional subscribers such as self-employed and small business owners, who are struggling due to inflation and COVID-19, will bear less health insurance premium burden."