Self-Employed Health Insurance Premium Burden Reduced by 25,000 Won Starting This Month

Amendment to the National Health Insurance Act to Take Effect from February This Year
Abolition or Reduction of Automobile and Property Insurance Premiums

From this month, the health insurance premiums imposed on regional subscribers are expected to decrease by an average of about 25,000 KRW per month. This is thanks to the abolition or relaxation of the 'automobile' and 'property' factors reflected in calculating the premiums for regional subscribers.

The Ministry of Health and Welfare announced that following the end of the public notice period for the 'Amendment to the Enforcement Decree of the National Health Insurance Act,' which was conducted over two weeks from the 15th to the 29th of last month, the new premium calculation plan will be promulgated and implemented in February after going through the Deputy Prime Minister's meeting and the Cabinet meeting. The amendment will apply from the February premiums for regional health insurance.

Currently, Korea is the only country in the world that imposes insurance premiums on automobiles owned by regional subscribers. The amendment aims to abolish this premium and expand the basic deduction amount for property insurance premiums from the current 50 million KRW to 100 million KRW. As a result, the burden of insurance premiums on automobiles and property will be eased.

Through this, among the 3.53 million households of regional subscribers who pay property insurance premiums, 3.3 million households are expected to see their premiums decrease by an average of 24,000 KRW per month, and among the 96,000 households paying automobile insurance premiums, premiums are expected to decrease by an average of 29,000 KRW. In total, the Ministry of Health and Welfare anticipates that 3.33 million regional subscriber households will benefit from an average monthly health insurance premium reduction of 25,000 KRW.

Korea's health insurance premium system is divided between workplace subscribers and regional subscribers. Workplace subscribers are charged premiums based solely on income (including income other than salary) according to the premium rate, whereas regional subscribers have been charged premiums by scoring income, property, and automobiles and applying a unit price per score.

Because the premium system is dualized, there has always been controversy over fairness. In particular, while property and automobiles of regional subscribers, which are unrelated to income, are charged premiums, paradoxically, dependents with income who are covered under workplace subscribers do not pay premiums.

Among OECD member countries, only Korea and Japan impose regional health insurance premiums on property such as real estate. However, since the proportion of property insurance premiums in Japan is less than 10%, Korea is effectively the only country charging health insurance premiums on property. Additionally, Korea is the only country that imposes premiums on automobiles.