Despite Fierce Opposition from the Medical Community, Law Amendment Passed After 14 Years
The amendment to the Insurance Business Act, which simplifies the claims process for indemnity health insurance?a long-standing issue in the insurance industry for 14 years?has passed the National Assembly plenary session. Starting as early as next year, patients will be able to claim insurance benefits immediately after hospital treatment without having to obtain and submit additional documents to the insurance company.
On the 6th, the National Assembly passed the amendment to the Insurance Business Act, focusing on simplifying the claims process for indemnity health insurance, during the plenary session. Although attempts to improve the indemnity insurance claims procedure have repeatedly failed over the past 14 years since the Anti-Corruption and Civil Rights Commission recommended improvements in 2009, this year the bill passed through the National Assembly’s Political Affairs Committee, the Legislation and Judiciary Committee, and the plenary session.
Once this law is implemented, indemnity insurance subscribers will no longer need to obtain various paper documents; they can simply request the hospital after treatment, and the insurance claim will be automatically submitted. It is expected that cases of giving up insurance claims due to the inconvenience of revisiting hospitals or issuing documents despite paying premiums will sharply decrease. According to the office of Yoon Chang-hyun, a member of the People Power Party, unclaimed indemnity insurance benefits were estimated at 255.9 billion KRW in 2021, 251.2 billion KRW in 2022, and 321.1 billion KRW in 2023.
Hospitals will also experience a reduced burden from unnecessary document issuance, and insurance companies will be able to use the costs and manpower spent on insurance claim reviews more efficiently.
However, some issues remain unresolved, such as the selection of the "intermediary institution." The medical community has strongly opposed the passage of the law itself, fearing that medical information of indemnity insurance subscribers could be leaked through specialized intermediary institutions entrusted with the claims process.
The medical community has particularly opposed the Health Insurance Review and Assessment Service (HIRA) becoming the intermediary institution, as they are reluctant to have non-reimbursed treatment details from clinics and hospitals transferred to HIRA, fearing the disclosure of non-reimbursed information.
Meanwhile, the amendment includes provisions that prohibit insurance companies from using or storing information and data obtained during the construction and operation of their IT systems for purposes other than their business or from disclosing secrets. Violations of these provisions will be punishable by imprisonment of up to three years or a fine of up to 30 million KRW.
Since the law will be enforced one year after its promulgation (two years for clinics with fewer than 30 beds), simplified electronic claims are expected to be possible as early as the end of next year.
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