South Korea’s National Health Insurance Program Going Broke
This seems to happen to every national health insurance program, at some point taxes have to be raised to make up for increased costs which is difficult politically for politicians to do. Thus they begin to run into deficits:
Picture via BusanMike Flickr page.Major forms of social insurance in South Korea are threatened with unsustainability. Health insurance finances in particular are set to run out in ten years without an increase in premiums or cuts to payouts. On this basis, the administration has argued for raising premiums and reducing benefits – an approach it is billing as “the right cost, the right payout.”But with income and generational differences poised to generate conflict over any social insurance changes, no matter how badly needed, the issue is now likely to be a key concern on the upcoming political calendar, and the 2016 parliamentary and 2017 presidential elections in particular.
On Dec. 4, the administration published a report on South Korea’s long-term financial prospects through the year 2060. The analysis focused on the future financial situation based on the current economic growth rate and changes in the population structure, assuming no or only minor changes in the social insurance system. It marks the first time an administration has ever published financial predictions for a date so many decades away. [Hankyoreh]
You can read the rest at the link.
I do not completely agree with your point that “This seems to happen to every national health insurance program, at some point taxes have to be raised to make up for increased costs”-
I have three disagreements:
1. The idea that the private sector is magically more “efficient” is simply a lie. Private healthcare schemes can be equally as expensive. I live in Australia and over here we are actually paying a lot of money propping up the private medical insurance sector. In Australia successive right wing governments have been promoting the private sector over the government run healthcare program- for example the government is paying subsidies on private health insurance premiums for individuals who take up health insurance with a private company. Government subsidies on private health insurance schemes in Australia have not helped anyone and only lined the pockets of rich corporations – this money could have been better spent on improving the public sector.
2. South Korea’s problem is that they are restricted in raising corporate taxes because large sections of the economy are controlled by virtual monopolies in the Chaebol- some single corporate groups own as much as 20% of the economy. South Korea is basically a corporate controlled state, with large tax breaks for monopolies. If anything it shows not a failure of nationalised healthcare, but the problem when you have a private sector that is so powerful that it can hold a nation to ransom.
(Here is an article on tax cuts for the Chaebol http://english.hani.co.kr/arti/english_edition/e_business/623602.html ).
The whole idea that we need to cut services or raise taxes is just a sick joke and a neoliberal lie. The whole logic of privatisation is for corrupt politicians to disinvest money from public sectors, run a propaganda campaign in favour of privatisation and then sell the services off dirt cheap to their corporate backers.
The real question, therefore, is why do we allow the political process to be corrupted in order to hand over pubic services to the hands of power hungry corporations?
Something has to give to be honest, we are all sick and tired to government handouts to corporations, low corporate tax rates, stagnant wages, welfare cuts, and public assets being sold off by corrupt politicians to the corporate mates. The age of handouts and entitlements for the rich and powerful must end.
Robert, bless your misguided socialist heart, you describe exactly why we need government out of health care and then claim we need more. You’re a pretty sick puppy. And, as I’m going through aggressive chemotherapy, I think I know sick when I see/smell/hear/taste/touch/read it…
What Korea needs is a Medical Standards Board that’s more robust than the Maritime Standards Board that allowed the ferry to go down with all those middle school kids.
Then they need to let providers practice with no government subsidies and no kickbacks because those only encourage corruption. Reread James Herriott. Doctors can live on more than a government or corporate paycheck.