Employee health insurance contribution rate rises to record next year

[Photo by MK DB]

The health insurance contribution rate for salaried workers has been set above 7 percent for the first time next year under a revised act amid a sharp rise in premium spending and aging population.

Under the revised National Health Insurance Act announced by the Ministry of Health and Welfare after receiving approval from the Cabinet Tuesday, employee-insured contribution rate will go up to 7.09 percent from Jan. 1 from 6.99 percent this year. It is the first time the rate will go above 7 percent after the merger of insurance schemes in 2000.

The contribution rate for each employee and employer will be 3.545 percent under a 50 percent share rate. The monthly average insurance fee an employee with annual average wage of 49.7 million won ($38,599) needs to pay next year will go up 2,069 won to 146,712 won from 144,643 won or 24,828 won more a year.

The amount per premium point of residence-based participants in the health insurance scheme will also be raised to 208.4 won from 205.3 won, which translates to a 1,598 won increase on a monthly average per household from 105,843 won to 107,441 won.

The change had been set by the Health Insurance Policy Review Committee in August.

The contribution rate for insured employees has been on a rise in recent years.

According to National Health Insurance Corp., the rate rose to 6.99 percent in 2022, up from 6.12 percent in 2017, 6.24 percent in 2018, 6.46 percent in 2019, 6.67 percent in 2020, and 6.86 percent in 2021. The increase rate came to 2.04 percent in 2018, 3.49 percent in 2019, 3.2 percent in 2020, 2.89 percent in 2021, and 1.89 percent this year.

The steady rise in the contribution rate comes as aging population increases.

Data from The Board of Audit and Inspection of Korea and National Health Insurance Corp. showed that cumulated insurance reserves are projected to completely run out in 2029.

There have been calls that the government should raise the health insurance rate cap from the current 8 percent to cope with rapidly depleting coffer, which would require an amendment in National Health Insurance Act.