The Anti-Corruption and Civil Rights Commission (ACRC) recommended on the 18th that the Financial Services Commission and the Financial Supervisory Service improve the system, stating that indemnity insurance is not properly covering the cost of medicine for patients who take medication over the long term.
Currently, indemnity insurance covers outpatient treatments within a daily limit (ranging from 100,000 to 300,000 KRW, depending on the subscription period), including consultation fees, test costs, injection fees, and pharmacy dispensing costs. This requires patients with chronic conditions like hypertension and diabetes, who need to take medication over an extended period, to fully bear the cost of their medicines.
The ACRC advised that indemnity insurance should separately cover dispensing costs for prescriptions exceeding 30 days for conditions covered by health insurance benefits.
For inpatient treatment, under the fourth generation of indemnity insurance sold since July 2021, hospital treatment fees, in-hospital prescription costs, and discharge prescription drug costs are covered within an annual limit of 50 million KRW. In contrast, coverage for outpatient medication costs has been relatively insufficient.
Indemnity insurance covers non-insured items like injectable drugs and manual therapy, but not the cost of medication for patients requiring long-term drug therapy. The ACRC explained that this means indemnity insurance is not properly fulfilling its complementary role to health insurance.
The ACRC also recommended that the financial authorities establish design standards and standard terms and conditions for indemnity insurance products specifically for the elderly and those with pre-existing conditions. Unlike regular indemnity insurance, these products lack standardized terms and conditions, leaving consumers without adequate protection.
Insurance for those with pre-existing conditions allows for a simplified subscription review, but premiums are about twice as high as general insurance. However, often they do not cover the prescription dispensing costs necessary for chronic disease sufferers like those with hypertension or diabetes.
The ACRC urged the regulations and standards of the Financial Supervisory Service’s insurance business supervision rules and the Financial Services Commission’s insurance business enforcement regulations to establish design standards and standard terms for indemnity insurance for the elderly and the chronically ill and to incorporate coverage for outpatient prescription dispensing costs.
Yu Cheol-hwan, the chairperson of ACRC, requested cooperation from financial authorities, saying, “Essential medical cost coverage is necessary for citizens who require long-term medication.”
