Latter-Half Funding Shortfall Looms Amid Advance Payment Fallout

A large-scale incident of unpaid medical fees, approximately 220 billion won owed to medical institutions and pharmacies last year, occurred due to delays in disbursement. This year's budget is being used to cover last year's unpaid amounts, a move that analysts say increases the possibility of a funding shortfall in the latter half of the year. The government's advance payment of 220 billion won in medical aid expenses that were not disbursed last year, coupled with a rise in beneficiaries and increasing medical service costs, has led to warnings that finances in the latter half of this year could be in jeopardy. This situation could place an unexpected burden on the medical safety net for low-income individuals.

Indeed, the increase in medical aid beneficiaries is significant. As of February 2024, there were 1,639,000 medical aid beneficiaries, exceeding the initial budget's projection by over 30,000. This marks a steep rise compared to 1,520,000 beneficiaries in 2023. The Ministry of Health and Welfare attributes the government's inaccurate demand forecasts to structural factors, including policy changes such as the expansion of health insurance coverage, which converts non-covered services to covered ones and thus increases treatment costs, and the easing of criteria for dependent relatives since 2019, leading to more beneficiaries.

The National Assembly's Health and Welfare Committee and the National Assembly Budget Office have pointed out that simply increasing the budget is insufficient to fundamentally resolve the financial issues, despite the rising expenditures. They emphasized that improving the accuracy of expenditure forecasts based on beneficiary fluctuations is a critical task.