[1mm Financial Talk] KakaoPay Hospital Bill Claim Service Falling Short by '2%'

Expansion of Automatic 'One-Stop' Insurance Claim Service
Partner Hospital List Not Disclosed... Difficult to Know Before Visit

[Asia Economy Reporter Minwoo Lee] There are criticisms that Kakao Pay’s ‘Hospital Bill Claim’ service, which it has been focusing on, is only ‘half-baked.’ Although it is a service that allows users to claim insurance benefits ‘one-stop’ without the need to submit proof documents directly, similar to the long-awaited simplification of indemnity health insurance claims in the non-life insurance industry, consumers have no way to check affiliated hospitals in advance.

According to the industry on the 20th, Kakao Pay recently expanded its simple indemnity insurance claim service, ‘Hospital Bill Claim.’ It added 47 large general hospitals, including Seoul National University Hospital, Severance Hospital, and Korea University Hospital, as affiliated hospitals.

The hospital bill service was born out of the awareness that claiming insurance benefits is difficult. It was created based on the fact that many people do not claim insurance benefits because the process is cumbersome or complicated, automating this process. By using the ‘Direct Claim’ feature within the hospital bill claim service, users can automatically retrieve treatment details from affiliated hospitals and claim insurance benefits on Kakao Pay. Previously, users had to open the insurance company’s application (app), take photos of documents, and send them. This is a step ahead in implementing the simplification of indemnity insurance claims, a long-standing wish of the insurance industry. According to the Korea Insurance Research Institute, 95% of indemnity insurance subscribers either do not claim insurance benefits or claim only small amounts averaging less than 500,000 KRW annually.

However, there are also criticisms that this service is only half-complete. This is because users have no way to know in advance which hospitals they can use this service at. Even if they search for hospitals on map apps or various search portals, they cannot confirm whether the hospital is affiliated with Kakao Pay. Kakao Pay also does not provide a list of affiliated hospitals. Users can only find out through notice boards displayed when they visit the hospital directly. Kakao Pay stated, “When visiting affiliated hospitals, users can check notices that Kakao Pay’s ‘Direct Claim’ is available,” and added, “We will continuously enhance the service by reflecting user feedback.”

There are various interpretations as to why Kakao Pay does not utilize methods such as maps or search on its platform to further promote and activate the service despite having the means to do so. Some say it is simply a strategic ‘misjudgment,’ while others believe it is due to caution toward the medical community’s opposition to the simplification of indemnity insurance claims. An insurance industry official said, “Since this is a service where consumers can immediately feel the convenience of insurance, it is puzzling that it is not more widely promoted and utilized, which could increase customer demand for simplification of indemnity insurance claims,” adding, “Especially considering that small and medium affiliated hospitals are not disclosed, it seems possible that private practitioners are concerned about being labeled as ‘traitors’ by the medical community.”

Previously, the medical and insurance industries have been at odds for over 10 years since 2009 over the simplification of indemnity insurance claims. Simplification requires cooperation from the Health Insurance Review & Assessment Service (HIRA) and medical institutions for information transmission, but the medical community strongly opposes it, citing issues such as leakage of medical information and administrative burdens, which could lead to problems like premium increases. Due to opposition from the medical community, related bills have not passed in the National Assembly. Although Jung Ji-won, chairman of the Korea Non-Life Insurance Association, reiterated the importance of simplifying indemnity insurance claims in his New Year’s address and at a press conference the day before, the bill for simplification was excluded from the 45 agenda items reviewed by the National Assembly’s Political Affairs Committee’s first subcommittee on the 16th.