Last year, the National Health Insurance Service (NHIS) increased its expenditures by 9.6% compared to the previous year, but with revenues rising by 10.3%, it succeeded in expanding its surplus by approximately 800 billion KRW.
On the 28th, the NHIS announced that the 2022 National Health Insurance financial balance (based on cash flow) recorded an annual surplus of 3.6291 trillion KRW. Accordingly, the accumulated reserves also increased to 23.8701 trillion KRW (equivalent to 3.4 months of benefit payments).
This financial status represents an increase in surplus of 806.2 billion KRW compared to the previous year's surplus of 2.8229 trillion KRW. The NHIS explained, "Both revenues and expenditures increased compared to the previous year, but the revenue growth outpaced the expenditure growth, improving the financial balance." On the revenue side, increases in insurance premium income and government subsidies were major factors, while on the expenditure side, the recovery trend in medical utilization centered on clinics and increased COVID-19 related expenses were key contributors.
Regarding revenues, although the burden of insurance premiums for regional subscribers was reduced due to the second phase reform of the health insurance premium system starting in September last year, income increased by 8.2852 trillion KRW compared to the previous year due to income growth and economic expansion. Notably, the revenue growth rate was 10.3%, the highest in the past five years. Specifically, the factors included ▲a steady increase in the number of regular workers leading to a 3.2% rise in workplace subscribers ▲economic growth (4.1%) and nominal wage increases (5.0%) resulting in a 4.0% rise in workplace monthly wage amounts ▲an increase of 3.3 trillion KRW in insurance premiums from year-end tax adjustments for workplace workers ▲and a 2.2 percentage point rise in the collection rate of regional subscriber premiums due to strengthened collection of arrears.
On the expenditure side, medical utilization recovery and other factors caused expenditures to increase by 7.479 trillion KRW compared to the previous year. The expenditure growth rate of 9.6% was the highest in the past three years. Detailed factors included ▲a 12.9% increase in benefit payments related to mild respiratory diseases that had decreased in the early COVID-19 period ▲a 16.2% increase in outpatient benefit payments at clinics, which have a high outpatient ratio ▲expanded support for COVID-19 testing and treatment costs (4.1 trillion KRW) due to the Omicron spread in the first half of last year ▲expenditure increases of about 1 trillion KRW due to fee increases ▲expansion of cash benefits for cancer and childbirth medical expenses ▲and an increase in the number of health screening participants.
The NHIS self-assessed that last year it worked to strengthen medical coverage for severely ill patients and vulnerable groups while maintaining the medical quarantine system through COVID-19 response efforts. In terms of coverage enhancement, efforts included expanding the scope of catastrophic medical expenses and raising support limits (to 50 million KRW) through legislative amendments, and including high-cost drugs such as Kymriah and Zolgensma in benefit coverage. Regarding COVID-19 response, support was provided for rapid antigen tests, PCR test costs, and isolation and home treatment expenses.
Meanwhile, the NHIS has been steadily pursuing tasks to strengthen financial soundness in response to financial uncertainties, as well as improving expenditure efficiency and reducing costs. Although a surplus was achieved for two consecutive years, future financial uncertainties are expected to increase due to global economic recession, declining birth rates and aging population leading to a decrease in the working-age population, reaching a super-aged society by 2025, and recovery in medical utilization. The NHIS plans to further strengthen financial management according to the "Measures to Enhance the Sustainability of Health Insurance" announced last month and expand support for essential medical needs under the "Essential Medical Support Measures."
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