"Why are you going to lose money if this is the case?" Why did you reduce the coverage of real loss insurance despite concerns over self-payment "bomb"?

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: January 13, 2025 (Monday)
■ Talk: Jeong Hyeong-seon, professor of the Department of Health and Public Administration at Yonsei University (Chairman of the Special Committee on Medical Reform specializing in essential medical and fair compensation)

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.
◇ Reporter Cho Tae-hyun (hereinafter referred to as Cho Tae-hyun): When I opened the door earlier, I told you that it was the second health insurance. I think a lot of people have it. It's about loss insurance. Those who think that I also have real loss insurance, I think you should listen to this interview more carefully today. This is because the government has come up with a reform plan. Let's find out more about what, how, and why we need to change it. Let's connect those who participated in this work at the Special Committee on Medical Reform. Jeong Hyeong-sun, professor of public health and administration at Yonsei University, is she here?

◆Jeong Hyung-sun, professor of the Department of Health and Public Administration at Yonsei University (hereinafter referred to as Jeong Hyung-sun): Yes, hello, I'm Jeong Hyung-sun.

◇ Cho Tae-hyun: Yes, hello, professor. When we go to the hospital, we get this health insurance and pay for medical treatment. Sometimes I hear that it's a non-payment item. There are treatments that are not covered by health insurance, but why are they divided like this?

◆ Jeong Hyeong-seon: Some medical practices that medical professionals do have to do this essential, and some are more selective than that. For example, skin care and other things are very optional, and there are some options for single rooms such as high-level room fees. But you have to be admitted to a six-person room or you have to have an appendectomy. These things are essential, but these things must be paid by health insurance and have little or very low copayment. However, the low necessity and high choice are the high-level hospital room fees, and the burden on them is very high.

◇ Cho Tae-hyun: You told me the reason for the division, and in fact, although Korea's health insurance is quite good, there are not a few non-benefit items. That's why I usually buy loss insurance, but to what extent do you cover the non-payment items of loss insurance?

◆Jeong Hyung-sun: There can be many explanations for the role of real loss insurance this time, but first of all, the whole nation is covered by health insurance in Korea. It is also compulsory for everyone to be enrolled, so first of all, the principle is that the National Health Insurance does everything. However, a system called loss insurance was created about 20 years ago, and a system was created to pay insurance money for parts that are not covered by health insurance. Therefore, it is basically done by health insurance and loss insurance is only a supplementary role. You have to understand that first, but what real loss insurance does is not covered, as you said earlier. There are also payments for non-benefits that are not covered by health insurance, and even if health insurance provides them, there is a percentage of out-of-pocket expenses. In loss insurance also pays a certain portion of your burden as insurance money. So, if you ask me if I have health insurance now, I can pay the full amount of my health insurance as a non-payment, or I can pay only a part of it. Those who have real loss insurance paid insurance premiums, so if you cover these parts later, the price you feel will almost disappear. As a result, it is easy for doctors to recommend it, and patients are likely to use it even if they don't really need it because they want to use it more because they have paid all the insurance premiums. So, if you don't put a scalpel on these parts and adjust them, in the long run, the real loss insurance premium will rise and the burden on individuals may increase. This is the overall trend.

◇ Cho Tae-hyun: So, it is an auxiliary loss insurance, and it is used even when it is not necessary, so overall insurance premiums are raised, and insurance premiums are passed on to people who do not use it, so it needs to be reformed. If so, I think we need to look at what changes little by little. Actually, there's one thing I don't miss when talking about real loss insurance. It's manual therapy, but how does it change?

◆Jeong Hyeong-seon: The proposal announced this time does not specifically confirm how to treat a certain treatment, but the government has announced a rough flow in the form of a public hearing or debate. We will collect more opinions and proceed with the final draft this year. However, as you have asked, people who need manual therapy themselves may feel that there is something physiotherapy that is very necessary, but in a way, health insurance is a field of great choice. So there may be cases where it is essential, but there is a possibility that this may be too much of an abuse, and as I said, if real loss insurance covered this, there could have been unnecessary excessive medical care. So this time, I will manage these areas in the form of management benefits and bring them into the health insurance case and manage them in a certain way. This is one of the biggest plans.

◇ Cho Tae-hyun: In that case, in the end, the loss insurance does not deal with all of them, but the individual burden has become bigger. Do we just look at it like this?

◆ Jeong Hyeong-seon: First of all, from the individual's point of view, in the case of people who didn't have real loss insurance in the past, if you want to receive it, you have to pay the full amount, so you have to pay it yourself, so shouldn't you? However, if the health insurance benefits are transferred this time, there are two effects. One is manual therapy, but if you look at it, the price is 10,000 won, and some are 300,000 won.

◇ Cho Tae-hyun: That's right.

◆Jeong Hyeong-seon: So when you do a package, you do it in a package and a package of 1 million won several times. So, the price is standardized to some extent, and this means that under these conditions, health insurance will set it at 50,000 won, for example. Because of that, first of all, there is one thing that eliminates uncertain situations for consumers by setting prices clearly. Another thing is that if health insurance introduces it, it is not essential for health insurance to do all of it, so they will pay up to 45,000 won, which is 90%, or 40,000 won, which is 90%. Then, loss insurance covers some of the rest of the parts.

◇ Cho Tae-hyun: First, make sure the price is clear, but health insurance will reduce the support, so the rest will be covered by real-life insurance. If you do that, will you have a problem with the health insurance finance?

◆ In the case of health insurance finance, if we talk about manual therapy now, the price will be set to an appropriate level and only 5% to 10% of it will be paid by health insurance, so health insurance recognizes the necessity of medical care to some extent and the health insurance will pay for that part. So, the increasing burden there is to reduce the burden on the entire people, which is covered by the health insurance with finances, and instead, the people use it more than necessary. Another thing is that if you connect it with real loss insurance, it was previously said that the full amount of self-payment was non-payment, so the full amount of it should have been covered by real loss insurance. That's good, but this time, it's good to cover real-life insurance, but even if it's good at that moment, it will raise insurance premiums in the long run, so if you pay 90% for health insurance, for example, 50,000 won is 45,000 won, but up to 40,000 won, which is 95% of the burden, will be paid by you and only 5% or 10% will be paid by real-life insurance.

◇ Cho Tae-hyun: Then, there will be no significant impact on the health insurance finances, is it okay to understand like this?

◆Jeong Hyeong-seon: That's right. There is no significant impact on the health insurance finances, but rather, we will monitor even those areas where health insurance is non-benefit, and do quality management and everything. That's what it means.

◇ Cho Tae-hyun: Okay. If health insurance is done directly, uncertainty will be greatly reduced in this regard, such as determining the price as you said. I think you can think about it in this aspect, too. There are probably people who really need manual therapy, right? But are there any concerns that such people will be placed in the blind spot when they are reformed in this way?

◆ Jeong Hyeong-seon: There are parts that you really need. If there are parts that are needed in terms of physical therapy, that is covered by health insurance, so those conditions have not been announced until that point, but usually health insurance will be applied in some cases, and health insurance will be available in some cases. It means that we monitor it to some extent with those things. What we're talking about now is that in the case of indemnity insurance, in the short term, insurance payments seem to decrease for those who paid insurance premiums, but as I said earlier, insurance premiums continue to increase in the long term. Insurance called the first generation of indemnity insurance was initially 10,000 won to 20,000 won, but now it is more than 100,000 won. I hope this increase in burden eventually goes up because of what is really needed, but a lot of them ask if you have insurance or real loss insurance, and as many people feel, it uses more than what is needed to raise real loss insurance premiums in the long run. The announcement just now shows that this is a new product. We call it a fifth-generation product. For new products that will be sold starting this year, let's make these conditions clear and create a system in which insurance premiums will be sold at 10,000 won and later rise to 50,000 won and 100,000 won. Therefore, we need to make real loss insurance a system that has soundness. In the past, we sold something that could not be monitored, so the first and second generation insurance brought about the problem of raising premiums now. So, the purpose of the system is to sell products that maintain such soundness in the future so that the burden of the entire people, including non-benefits, is maintained at an appropriate level.

◇ Cho Tae-hyun: I think everyone has experienced this at least once, recommending treatments that don't seem to be necessary at a hospital specializing in traffic accidents. In this respect, it can be said that a reform proposal has been made, but he told me about the generation a little while ago. So these reforms don't apply to the first to fourth generations, right?

◆Jeong Hyeong-seon: That's right. Basically, the conditions that are already subscribed are called terms and conditions. The terms and conditions set in the terms and conditions cannot be changed. If you want to change it, there are things that are supposed to be renewed every certain period, but when you renew it, you change it to new conditions. However, as I said earlier, there are almost 15 to 16 million subscribers to the first and second generation insurance, and this insurance goes without a contract until the age of 100. As I said earlier, if it is non-benefit without various restrictions, all of them are paid. However, some recently made products can be contracted, for example, if they are made in 4G 2021, they can be renewed every five years, so they are now new. However, basically, the parts that reduce the burden of real-life insurance by increasing the burden on the direction that they want to announce this time are about the 5th generation of insurance that renews the contract.

◇ Cho Tae-hyun: Okay. If so, the problem now is that the first and second generations are mainly the problem. But there's no other way but to recommend these people to transfer to the 4th or 5th generation, right? Then, I don't think things will get that better, what do you think?

◆Jeong Hyeong-seon: So the government asked the 4th generation to renew the renewal conditions while presenting various terms, but they didn't respond that much, so existing insurance subscribers are going as they are. So this time, the government is more interested because the first and second generation insurance companies were about 10,000 won when they signed up, but now there are quite a few people who pay 150,000 won and 160,000 won. That's why it's quite burdensome. That's why we call it a repurchase by paying some interest rate on what we've been doing so far, so we can repurchase it again by renewing the insurance or whatever. The government offered to do such a thing this time. However, since it is not compulsory in itself, it is still unknown how much the first and second generations who already have vested interests will transfer, as our anchor said. But the Government will show this reality and appeal to the Government that some adjustments need to be made to prevent premiums from continuing to rise. I think you can take it like this.

◇ Cho Tae-hyun: Okay. There are always a lot of recommendations whenever the generation improves, but I asked because I don't think I can see a lot of things that are transferred. Since we've talked a lot about the effects, we'll go over the concerns little by little. There is a concern that if we go into the fifth generation like this, the burden of medical expenses on consumers will eventually increase. What would the professor say about this?

◆ Jeong Hyeong-seon: First of all, medical expenses can be said to be the burden of medical expenses. For those who have released real loss insurance, such as the 1st and 2nd generation insurance, if it is paid according to the 5th generation insurance, the burden will increase, but as I said, it will be limited to the salary for new subscribers. Instead, those who sign up for 10,000 won and 20,000 won and that will increase to 150,000 won and 160,000 won will decrease. Don't you think so? So, from the perspective of the people as a whole, the burden is that they will deal with the burden of all medical expenses, including loss insurance, at once, so from such a long-term perspective, the burden of the people, the burden of medical expenses, is reduced. However, in the case of real loss insurance, I think it should be understood that there is a general trend of selling such insurance products easily as in the past and preventing them from raising insurance premiums if there is a problem later.

◇ Cho Tae-hyun: So, the burden on individuals may increase, but from the overall burden, this has the effect of being suppressed. Do we just understand it like this?

◆Jeong Hyeong-seon: That's right. Therefore, it should be premised that the overall direction of real loss insurance is based on Korea's national health insurance and that real loss insurance is only a supplementary role. Since the current financial situation in health insurance is not that bad, if there is a certain necessity, it is actually the most desirable direction to bring it into the salary case and cover it by health insurance so that it does not need real loss insurance. Insolvency insurance also affects health insurance because we don't have enough time right now.Ma sometimes affected the finances of health insurance by receiving treatment even for health insurance in order to treat non-benefit insurance. So, the adjustment plan for that part is also included this time.

◇ Cho Tae-hyun: Okay. But another thing to look at is that among the non-benefit items that are not yet covered by health insurance, there are new drugs and high-tech applications. For example, shouldn't we say that there is also this concern about the possibility that the patient's options will be reduced when we give examples such as robotic surgery?

◆ Jeong Hyeong-seon: Among those parts, the necessity is strong and the patients must use it, especially in the case of a severe disease, including the health insurance coverage. If it is non-benefit, but the real-life insurance has covered it so far, it is a robot surgery, for example, in real-life insurance. Then, it can only be done if the real-life insurance has a monitoring system or something like that that that can be paid for by confirming that the robot surgery is used for the part that is truly necessary. If you pay just because you did it unconditionally even if it's non-benefit, you'll get real loss insurance right away. Even if it's good, it would be nice if it's someone who doesn't have real loss insurance or even if you have real loss insurance, it's good if you use what you need when you renew it again, but if there are parts that don't, it will eventually lead to an increase in insurance premiums for other subscribers of real loss insurance and an increase in insurance premiums for yourself in the long run.

◇ Cho Tae-hyun: Okay. I think we can find a way if there is a need. I think what you've said so far is a draft. I think it will take a process to get to the final draft, what are the remaining processes?

◆Jeong Hyeong-seon: Yes, the 4th generation product came out in 2021, so it came out about 4 years ago. Therefore, there are many new products this year, including Special Agreement 1 and Special Agreement 2. Anyway, overall, at least in the first half of the year, plans for Special Agreement 1 will come out focusing on severe diseases. I think that by the second half of this year, 5th-generation products, including special contract 1 to non-critical diseases, will be released.

◇ Cho Tae-hyun: But there are concerns that the reform plan can be applied properly because it is in the impeachment phase.

◆Jeong Hyeong-seon: In fact, what's been discussed now, of course, is the Special Committee on Medical Reform, and the Special Committee on Medical Reform is supposed to do this in conjunction with the current government's increase in medical schools. But the truth is that health care reform was 20 years ago, and it is still doing it, and we will be talking about the same thing 20 years later. That's why it's very practical and policy-oriented. So, the core of this discussion was that the practical negotiations between the Ministry of Health and Welfare in charge of health insurance and the Financial Services Commission in charge of real-life insurance were the most difficult and difficult. This means that rather than changes in the government or the government, it becomes an agenda through a procedure that reflects reality in the process of negotiating like this, and it is somewhat visible as a policy, so these parts remain the same even if the government changes. That's why the government's change in the plan, which is 25 years in which these plans are implemented, does not undermine the plan that the Financial Services Commission or the Financial Services Commission is proceeding with. There may be some adjustments, of course, but the basic thing is that very important decisions are made. It would be correct to understand like this.

◇ Cho Tae-hyun: Okay. It's true that we need to reform this side. I would appreciate it if you prepared well so that there are no unexpected side effects. So far, we have talked about loss insurance with Jeong Hyeong-sun, a professor of public health and administration at Yonsei University. Thank you for talking today.

◆Jeong Hyeong-seon: Yes, thank you.