At Least 3.8 Trillion Won in National Health Insurance Costs Shifted
An audit has revealed that indemnity health insurance is causing at least approximately 12.9 trillion won in additional annual medical expenses, and is shifting at least 3.8 trillion won in costs onto the National Health Insurance system.
On May 14, the Board of Audit and Inspection announced that it had constructed and analyzed a linked database of 1 billion claims and payment records from the past five years (2018?2022), covering health insurance, indemnity health insurance, and automobile insurance, to assess the impact of private insurance such as indemnity and automobile insurance on the National Health Insurance finances.
According to the analysis of 313 million indemnity insurance claims from a total of 265.21 million people, and 476 million health insurance claims, categorized by indemnity insurance enrollment and claim status, those with indemnity health insurance used more medical services, including hospitalization and outpatient care, than those without it.
Indemnity health insurance policyholders had 2.33 to 7.7 more outpatient treatment days per year compared to non-policyholders, and 1.54 to 7.05 more inpatient treatment days annually.
According to the audit report, as of 2022, additional medical utilization by indemnity health insurance policyholders resulted in a total of 12.94 trillion to 23.28 trillion won in extra medical costs, of which the National Health Insurance covered 3.83 trillion to 10.92 trillion won.
The Board of Audit and Inspection explained, "This means that if indemnity health insurance policyholders had used the same level of medical services as non-policyholders, the National Health Insurance would not have incurred an additional 3.83 trillion to 10.92 trillion won in annual expenditures."
The Board also analyzed non-reimbursed (non-covered) medical services, which are the main coverage area of indemnity health insurance. In 2022, the top nine non-reimbursed treatments, including physical therapy and cataract surgery, generated an additional 3.5201 trillion won in annual medical costs, with the National Health Insurance bearing 721 billion won of that amount.
Among non-reimbursed items, physical therapy accounted for the largest costs, with 1.2461 trillion won in additional outpatient expenses and 1.2357 trillion won in additional inpatient expenses annually.
It was found that the disease codes provided by patients when claiming indemnity insurance from insurers and those entered by medical institutions when claiming National Health Insurance payments matched exactly in only about half of all cases.
Additionally, from 2019 to 2022, approximately 858 billion won in indemnity insurance payments were made in duplicate, and the number of duplicate recipients increased from 179,000 to 270,000 during the same period.
In the case of automobile insurance, 48% of the treatment costs paid by insurance companies to victims are "future treatment expenses," paid in advance based on anticipated future needs. However, it was discovered that even after victims received these future treatment payments, this information was not reported to the National Health Insurance Service, resulting in unnecessary continued National Health Insurance payments.
The Board of Audit and Inspection stated, "We have notified relevant agencies with policy recommendations, such as linking claims and review functions between health and indemnity insurance, connecting and reconciling information on out-of-pocket payments between health insurance and indemnity insurance, and establishing a legal basis for post-settlement." The Board added, "We have also recommended establishing legal grounds, procedures, and standards for the payment of future treatment expenses, sharing information on such payments, and requiring private non-life insurers to report insurance accident information to the National Health Insurance Service."
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