South Korea’s Ministry of Health and Welfare announced Monday a plan to overhaul the national health insurance scheme to reduce the fees for the low-income earners and hike those for the wealthy.  

The proposal’s main beneficiaries will be about 6 million households -- mostly self-employed -- who will see their monthly insurance premium reduce by half. Some 730,000 high-income earners or high-asset holders will have to endure higher premiums. Ordinary salaried workers with no major assets will see no change. 

“Some 6 million insurance holding households will see monthly insurance premium down by an average of 46,000 won ($40),” explained the ministry official Lee Chang-joon.

The envisioned new scheme seeks to plug loopholes in the current three-basis subscription system, which categorizes subscribers into the employed, the self-employed and the dependent. 

Criticism has mounted on the flaws of the segment of the self-employed. 

While some high-income earners exploit the system by underreporting their income levels, those in the bottom-low income bracket fell out of the basic insurance coverage failing to meet the set monthly contributions. 

To fix this problem, the ministry will abolish the current income evaluation system for the self-employed, which is based on one’s gender, age, income, asset and ownership of a vehicle, and introduce a minimum monthly premium of 10,310 won, which is equal to one that is applied to salaried workers. 

The new plan will seek to gauge a subscriber’s comprehensive financial status by taking into account their holdings of financial and non-financial assets on top of their reported salaries.  

Moreover, a total of 470,000 households currently registered as dependents will be subject to the same premium calculation scale used for the self-employed. 

So far, these households received medical insurance services without paying monthly premiums, as dependents of family members who are either self-employed or salaried subscribers. 

The plan, to be implemented gradually in three stages through 2024, requires amendment of the related law. The ministry said it will submit the revision bill to the National Assembly in May, aiming for its passage in the latter half of next year.  

The ministry said it plans to inject 20 trillion won into the health care services and work closely with related authorities to seek fiscal health.

By Kim Da-sol (ddd@heraldcorp.com)