"Unclaimed Indemnity Insurance Claims Average 280 Billion KRW Annually... Need for Claim Computerization"

Expected to reach around 320 billion this year
"Urgent passage of Insurance Business Act including claim simplification"

An analysis revealed that the unpaid insurance claims by subscribers of indemnity health insurance amount to an average of 280 billion KRW annually.

According to data analyzed by Yoon Chang-hyun, a member of the National Assembly's Political Affairs Committee from the People Power Party, using statistics from the National Health Insurance Service and insurance companies, the unpaid indemnity insurance claims were identified as 255.9 billion KRW in 2021 and 251.2 billion KRW in 2022.

This amount was estimated by multiplying the insured's out-of-pocket medical expenses covered, the medical expense share of indemnity insurance subscribers, the indemnity insurance coverage rate, and the proportion after deducting amounts below the deductible, then subtracting the actual paid insurance claims.

According to insurance companies' indemnity insurance performance data, the insurance claims paid in 2021 and 2022 were 12.46 trillion KRW and 12.89 trillion KRW, respectively. It is estimated that about 13.35 trillion KRW will be paid this year. Along with this, the scale of unpaid insurance claims is expected to increase to approximately 321.1 billion KRW. Over the past three years, an average of 276 billion KRW annually has gone unpaid.

Since the process of visiting hospitals or pharmacies to obtain and submit documents is cumbersome, there are many cases where insurance claims are not filed, leading to calls for the prompt implementation of electronic claims processing.

Earlier in June, a revision bill to the Insurance Business Act, which would allow indemnity insurance claims to be easily processed electronically, passed the National Assembly's Political Affairs Committee for the first time in 14 years. It is currently pending in the Legislation and Judiciary Committee. Consumer groups welcome the bill, expecting reduced inconvenience for consumers due to simplified claim procedures, but the medical community opposes it, arguing that it benefits only private insurance companies.

Rep. Yoon said, "If the Insurance Business Act amendment passes, an automatic indemnity insurance payment system can be established through information sharing between hospitals and insurance companies," adding, "As it will resolve customer inconvenience and enable payment of dormant insurance claims worth about 300 billion KRW annually, swift legislation is necessary."