Yoon Seok-yeol is speaking while presiding over a cabinet meeting at the Presidential Office building in Yongsan-gu, Seoul on the 29th. © Yonhap News” title=”▲ President Yoon Seok-yeol is speaking while presiding over a cabinet meeting at the Presidential Office building in Yongsan-gu, Seoul on the 29th. © Yonhap News”/>
▲ President Yoon Seok-yeol is speaking while presiding over a cabinet meeting at the Presidential Office building in Yongsan-gu, Seoul on the 29th. © Yonhap News
The government has decided to make a strong drive to improve the actual loss insurance system within the year. This is to solve the problem of actual loss insurance, which is considered a lifelong deficit product for insurance companies. The ‘medical shopping‘ controversy, including excessive uncompensated treatment, and frequent insurance fraud are considered chronic problems.
According to the insurance industry on the 29th, at the Insurance Reform Conference to be held on the 4th of next month, financial authorities, including the Financial Services Commission, and insurance industry officials plan to begin discussions to prepare improvement plans for actual loss insurance.
This is because President Yoon Seok-yeol ordered the Financial Services Commission Chairman and the Minister of Health and Welfare to “come up with an improvement plan for actual loss insurance within the year” in his plenary remarks at the 46th Cabinet meeting presided over at the Presidential Office Building in Yongsan-gu, Seoul.
◇Is it possible to block the source of excessive uncompensated treatment for ‘actual loss’?
The actual loss insurance paid out by four insurance companies, including Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance, from January to August this year was 5.482 trillion won. Of these, non-benefit items accounted for 59%, or KRW 3.2279 trillion. Non-coverage insurance payments increased by 13% compared to the previous year.
The insurance industry claims that non-covered treatment costs have soared as dermatology, orthopedics, and oriental medicine hospitals actively recommend non-covered treatment, such as extracorporeal shock wave and manual therapy, to actual loss insurance subscribers. If you use expensive treatment for free or at a low price through insurance, you will frequently receive unnecessary treatment. Accordingly, the industry is calling for measures such as raising the self-payment rate for non-benefit items.
According to Kwon Jeong-hyeon, a researcher at the Korea Development Institute, so-called ‘active’ actual loss subscribers who have received actual loss insurance benefits use 82% more annual outpatient services than actual loss subscribers who have never received insurance benefits. The number of days of hospitalization and hospitalization benefits and medical expenses were more than 5 and 6.5 times higher, respectively, compared to those who did not receive insurance benefits.
Insurance fraud aimed at unfairly collecting actual loss insurance money is rampant.
According to the Financial Supervisory Service the previous day, the Financial Supervisory Service, in cooperation with the Seoul Metropolitan Police Agency, arrested about 320 people involved in organized insurance fraud who swindled about 700 million won in actual loss insurance money through methods such as ‘splitting medical expenses’. Hospital A, discovered by the Financial Supervisory Service, recommended expensive, uncompensated treatment to patients and issued receipts for treatment fees for extracorporeal shock wave or manual therapy rather than the actual treatment received. This is to ensure that you can receive actual loss insurance money.
Considering that the daily outpatient insurance payment limit is 200,000 won, the daily treatment details were divided into amounts of 200,000 won or less, showing the meticulousness of splitting the medical expenses as if visiting the hospital over multiple days. Since it is difficult for insurance companies to determine whether treatment was absolutely necessary, insurance fraud targeting actual loss insurance money continues.
◇Insurance Reform Conference, following long-term care actual loss, reform of actual aid loss will begin in earnest.
It is interpreted that the government has set a deadline for submitting an improvement plan based on the judgment that moral hazard aimed at institutional deficiencies in actual loss insurance has gone too far.
It is expected that discussions on the actual cost insurance reform plan will take place in earnest in addition to the loss ratio by age group, which was previously scheduled to be discussed at the 4th Insurance Reform Conference.
Previously, at the 3rd Insurance Reform Meeting, the Financial Services Commission and insurance industry officials confirmed the scope of compensation for non-benefit items of long-term care actual loss insurance. To prevent excessive competition among insurance companies and excessive profit seeking by nursing facilities, the monthly payment limit for non-benefit items was set at 300,000 won and the self-payment rate was set at 50%.
An insurance industry official said, “As the existing actual losses brought about expensive non-benefit-oriented medical shopping and the loss ratio soared, improvements have been made to the fourth generation, but the problem has not yet been resolved.” He added, “The moral hazard of some subscribers is a damage to many good subscribers.” “It is a necessary reform in terms of getting back to work,” he said.
