Korea to amend laws to prevent foreigners from exploiting health insurance

Chinese patients leave the hospital after receiving medical treatments at a women’s hospital in Gangnam, Seoul on June 29. [Photo by Han Joo-hyung]

A growing number of Chinese have abused loopholes in South Korea’s private healthcare insurance services to get expensive treatment and surgery with insurance coverage.

Following diagnoses of cancer or brain disorders in China, the alleged free riders made themselves dependants of Chinese citizens with F-2 or F-5 visas living in South Korea to become eligible for health insurance programs offered by private insurers. Such examples are even going viral as useful tips on Chinese social media platforms such as Xiaohongshu.

Amid the rising number of foreign residents, such unfair practices among some Chinese have raised concerns about vulnerable private issuance programs in South Korea.

According to Maeil Business Newspaper, which tracked the insurance payouts for foreigners from major insurers on Thursday, the highest 30 payouts varied between 13 million won ($9,842) and 54 million won. Seven of the top 10 payouts involved Chinese beneficiaries or those of Chinese nationality. Most beneficiaries with higher payouts were patients with severe diseases, like cancer and brain illness.

However, some of the beneficiaries were accused of engaging in notice violations. They were believed to have exploited the vulnerability inherent in insurance coverages that Korean insurers find it hard to identify the local medical history or records of Chinese customers. The Chinese individuals didn’t report their pre-existing medical conditions and history to secure insurance coverage in South Korea, where local customers with pre-existing medical conditions, such as diabetes and cancer, often struggle or even find it impossible to secure medical insurance.

That raises the need for reforms in the South Korean immigration laws that give extraordinary benefits to Chinese individuals, who account for 40 percent of foreigners and 80 percent of foreign permanent residents in the country. Such excessive benefits for foreigners, especially the Chinese, have often been cited as a culprit for tensions between Korean nationals and non-nationals.

In response, the Ministry of Justice proposed on the same day to raise the limit in investment requirements for the Public Utility Investment Scheme, given that as much as 80 percent of immigrants with the visa are Chinese.

The General Investment Immigration System under the current immigration law in South Korea specifies that foreigners with an investment worth above 500 million won ($378,186) are eligible for residency, and if they keep the amount for 5 years, they get permanent residency. Under the High-investment Immigration System, immigrants with a higher investment worth above 1.5 billion won can immediately qualify for permanent residency. According to the recent proposal, the limit will be raised to 1.5 billion won for the former and 3 billion won for the latter.