Fast-aging Korea could see a deficit of 16 trillion won ($14 billion) in its medical insurance financing by 2020, a report warned Monday.

Without “fundamental change” in the overall system, the deficit would continue to swell in the coming years, the Institute for National Health Insurance, an affiliate of the National Health Insurance Corporation, said in its mid- and long-term financial report.

The NHIC has been in the red in recent years. After recording a deficit of 3.2 billion won in 2009, the medical insurance fund chalked up a deficit of nearly 1.3 trillion won last year.

The trend looks set to continue, with the deficit likely to snowball in decades to come. Korea’s aging population means that health care expenditure could more than triple between 2012 and 2030, while the income from subscribers’ contributions is likely to see only a twofold increase, the report said.

Amid surging health care costs for senior citizens, the expenditure for those aged over 65 will increase more than fivefold from 13.4 trillion won in 2012 to 70.3 trillion won in 2030.

The report forecasts the NHIC’s deficit to surpass the 10 trillion mark by 2018 and to widen to 15.9 trillion won in 2020, 29.2 trillion won in 2025 and 47.7 trillion won in 2030.

“The nation’s health financing has gone into the red due to a surge in health care spending, difficulty in raising the amount of contributions and the government’s conservative support. The deficit will continue to widen in the future,” said Park Il-soo, research fellow at the institute.

In order to stabilize the management of the NHIC, its financing should be secured fundamentally by expanding the income and reducing spending in reasonable ways, he added.

The Ministry of Health and Welfare, however, downplayed the dark outlook of the report, saying “it does not reflect new measures that the government is currently considering to secure income sources.”

“The government plans to expand the adoption of the ‘diagnosis-related group,’ a patient classification system, reduce the price of medicines and streamline the insurance payment system,” said an official of the ministry.

“Through new measures, the government will better manage health care financing in the future.”

By Lee Ji-yoon (jylee@heraldcorp.com)