S. Korean government warns pension and health care fund is in danger. (Image: Yonhap)
SEOUL, March 8 (Korea Bizwire) – A new analysis from the South Korean government warns the country of dangers facing pensions and the National Health Insurance Service (NHIS) in the coming years.
Some worrying findings from the analysis paint a grim picture for health care users and pensioners in South Korea, as the national health care fund is expected to suffer a deficit in 2018 and eventually run dry by 2023.
One of the biggest challenges facing the country is the burden of an aging population. A devastating impact on the national health care service is starting to be felt as elderly people increasingly drain health resources.
Individuals over the age of 65 accounted for nearly 40 percent of the population as of last year. By 2025, almost half of the population is expected to be elderly, according to the government.
Since a funding excess of 6 trillion won in 2014, the NHIS has enjoyed a steady upward trend in surplus. From last year however, national health care spending is forecast to grow at an annual rate of 8.7 percent from 52.6 trillion won, amounting to a whopping 100 trillion won by 2024.
“Necessary steps such as closing (health care) loopholes must be taken to reduce pension and health care spending before the national pension fund dries up,” said welfare director An Do-gul from the Ministry of Strategy and Finance.
A recent study published in The Lancet suggested that the average life expectancy for both men and women in South Korea will be the longest in the world by 2030, with the figure for South Korean women reaching beyond 90 years.
Oftentimes, critics mention access to affordable health care when explaining the striking gap between South Korea and countries like the U.S. where life expectancy is significantly lower.
However, faced with the prospect of soon becoming one of the world’s super-aged countries, calls are growing for effective measures such as diversifying national health care and pension fund investments in preparation for the future.
Hyunsu Yim (hyunsu@koreabizwire.com)
