South Korea National Health Insurance faces projected debt crisis by 2030

South Korea’s National Health Insurance Service is facing a severe fiscal crisis, with its debt-to-equity ratio projected to exceed the 100% management threshold by 2030. According to a mid-to-long-term financial management plan, the service expects annual operating deficits of several trillion won between 2026 and 2030.

The financial instability is driven by a structural mismatch where revenue is constrained while expenditures rise. While the government recently decided to freeze health insurance premium rates for 2027, medical service fees (medical prices) are scheduled to increase by an average of 1.65%. This imbalance, combined with rising benefit expenditures, is expected to cause the insurance business debt ratio to climb from 71.2% in 2026 to 107.4% by 2030.

Compounding these fiscal challenges is the difficulty in recovering medical expenses from premium defaulters. Data shows that while approximately 387.4 billion won in medical expenses were slated for recovery from individuals who failed to pay premiums between 2022 and 2025, the actual collection rate stands at only 2.38%. A significant portion of unpaid debts is being written off due to overseas migration or long-term departures, with foreigners accounting for 90.8% of such write-offs in 2025.