The Health Insurance Out-of-Pocket Maximum Increases More for Higher Income Brackets... "To Enhance Equity"

This year, the out-of-pocket maximum for health insurance premiums will increase significantly for higher income groups. The out-of-pocket maximum system is designed to reduce the economic burden on citizens caused by excessive medical expenses by refunding the difference when annual medical expenses (covered services) exceed a certain amount.

The National Health Insurance Service announced on the 22nd that "the maximum limit for high-income groups (8th to 10th deciles) was set below 8%, which is lower than the 10% level at the time the out-of-pocket maximum system was designed, so the threshold has been improved to about 10% of annual income." Accordingly, the basic maximum limit for the top 30% income group will increase by 12 to 30.4%. Specifically, the 10th decile will rise from 5.98 million KRW last year to 7.8 million KRW this year, the 9th decile from 4.43 million KRW to 4.97 million KRW, and the 8th decile from 3.6 million KRW to 4.14 million KRW. The Service stated, "We have promoted this to enhance fairness by minimizing the reversal phenomenon where high-income groups received more refunds, which was contrary to the original purpose of the system, and to rationalize the system." For example, in 2021, the average payment amount was 1.36 million KRW, but the 10th decile income group paid 3.12 million KRW, more than twice the average.

Additionally, the Service plans to introduce a separate maximum limit for long-term hospitalization (over 120 days per year) in nursing hospitals for the top 50% income group and above, applying the same standard as for low-income groups. Accordingly, the maximum limit for nursing hospital stays exceeding 120 days this year for the 6th to 10th deciles will increase by 29.8% to 69.6% compared to the previous year. For the 10th decile, this means a significant rise from 5.98 million KRW to 10.14 million KRW.

The Service also stated that to reduce the burden on citizens due to the sharp increase in the highest maximum limit caused by the system reform, prepayment (where institutions directly claim from the Service) will apply when costs exceed 7.8 million KRW. However, if a general hospital inpatient who received prepayment is later hospitalized in a nursing hospital for more than 120 days, the amount subject to the highest maximum limit will change, so the difference may be reclaimed later.