South Korea health insurance faces fiscal leakage from arrears and fraud

South Korea is facing significant fiscal leakage within its national health insurance system due to rising high-value premium arrears and fraudulent medical claims.

Data from the Ministry of Health and Welfare reveals that high-value health insurance premium arrears (exceeding 10 million won) more than doubled between late 2022 and July 2024, reaching 409.3 billion won. These high-value cases now account for 26.5% of all total arrears. Lawmaker Seo Young-seok noted that approximately 33.3% of the 21,000 households with high arrears have not even had their assets seized, highlighting a gap in collection effectiveness.

Simultaneously, fraudulent claims by medical institutions have caused substantial losses. Over the past five years, 1,137 medical facilities were caught claiming health insurance for non-covered services, such as fatigue-recovery nutritional IV drips, totaling 23.7 billion won in improper claims. When expanding the scope to all types of fraudulent health insurance claims, the total amount identified through local investigations reached approximately 138.9 billion won across 3,004 institutions. Lawmaker Kim Kyo-heung has called for fundamental measures to prevent further fiscal leakage caused by the moral hazard of repeated offenders.