354,000 Dependents Dropped After Health Insurance Step 2 Reform

81,000 More Than Authorities' Estimates

[Asia Economy Reporter Kim Young-won] Since the implementation of the second phase reform of the health insurance premium assessment system last September, the number of people excluded from dependents has reached 354,000.

According to data received by the office of National Assembly Health and Welfare Committee member Choi Hye-young from the National Health Insurance Service, as of October this year, the number of dependents is 17,574,000. This is a decrease of 354,000 dependents compared to August, just before the second phase reform of the premium assessment system, when there were 17,928,000 dependents. During the same period, the number of regional subscribers increased by 307,000.

The health insurance authorities estimated the number of dependents dropped due to the reform at about 273,000, but in reality, about 81,000 more people lost dependent status after the reform. A National Health Insurance Service official explained, "There are always fluctuations in the number of dependents as income changes monthly among subscribers," adding, "It can be seen as not a very large difference from the previous estimate."

Health insurance subscribers are divided into three categories: workplace subscribers, dependents, and regional subscribers. Dependents are mainly people who rely on their working children or family members for livelihood and enjoy insurance benefits without paying premiums themselves, as they are covered under workplace subscribers.

The National Health Insurance Service strengthened the annual income criteria for converting dependents with income and assets to regional subscribers from 34 million KRW to 20 million KRW or more through the second phase reform to prevent free-riding by dependents with income or assets. The asset requirement for dependents remains unchanged at a property tax base of 360 million KRW.

Previously, as the authorities steadily strengthened these conditions, the number of dependents has continuously decreased: 20,337,000 in 2016, 20,069,000 in 2017, 19,510,000 in 2018, 19,104,000 in 2019, 18,607,000 in 2020, and 18,090,000 in 2021.

The health insurance authorities decided to temporarily reduce part of the premiums for those who changed from dependents to regional subscribers due to not meeting the strengthened income criteria in the second phase reform, to alleviate the shock. This measure considers the recent rapid inflation and difficult economic situation. The reduction will be 80% in the first year after conversion, 60% in the second year, 40% in the third year, and 20% in the fourth year to ease the impact.

However, if a dependent loses their status due to failing to meet the unchanged asset criteria rather than the strengthened income criteria from the second phase reform, they will not receive such reduction benefits.