The National Health Insurance Service (NHIS) (Image courtesy of Yonhap)
SEOUL, Jan. 8 (Korea Bizwire) — South Korea’s National Health Insurance (NHI) system achieved a surplus for the fourth consecutive year in 2024, with its reserve fund reaching a record 29.7 trillion won, the National Health Insurance Service (NHIS) announced on January 7.
In 2024, NHI revenue totaled 99 trillion won, while expenditures amounted to 97.36 trillion won, resulting in a 1.72 trillion won surplus. Adjusted for 1.48 trillion won in advance payments to training hospitals facing financial challenges due to resident shortages, the surplus would stand at 3.2 trillion won.
Revenue and Spending Dynamics
Insurance premiums, which make up the majority of NHI revenue, increased by 3% in 2024. However, this growth slowed compared to the double-digit rises seen in 2021 and 2022, primarily due to the freeze in premium rates and slower wage growth among salaried workers.
Revenue from regional insurance contributions fell by 3.1%, impacted by expanded property tax deductions.
Government contributions rose to 12.2 trillion won, an increase of 1.2 trillion won from the previous year. Despite this, government support accounted for only 14.5% of total revenue, falling short of the statutory cap of 20%.
Investment returns on the growing reserve fund exceeded expectations with a provisional yield of 4.79%.
On the expenditure side, insurance payouts, which form the bulk of NHI spending, grew by 7.3% year-on-year. Emergency medical system support and prepayments to training hospitals contributed to the rise in costs.
Payments to general hospitals, clinics, and small medical institutions increased by 6–7%, while payouts to tertiary hospitals, typically serving as training centers, fell by 8.2%.
Future Outlook and Reforms
NHIS Chairman Chung Ki-seok emphasized the importance of maintaining fiscal stability amid demographic shifts and economic uncertainties. “While challenges remain, we will focus on preventing financial leaks, optimizing expenditures, and improving administrative efficiency to ensure the sustainability of the health insurance system,” Chung said.
The NHIS plans to use its stable financial footing to advance healthcare reforms, including supporting essential medical services and transitioning tertiary hospitals toward specialized roles.
Despite its robust performance in 2024, the NHI faces long-term challenges due to South Korea’s aging population and potential economic headwinds, underscoring the need for continued fiscal prudence and innovation.
M. H. Lee (mhlee@koreabizwire.com)
