How public and private health insurance coverage mitigates catastrophic health expenditures in South Korea

DOI: https://doi.org/10.21203/rs.3.rs-1548535/v1

Abstract

Background: Korea has instituted a private health insurance (PHI) scheme that covers the remaining expenses uncovered by the National Health Insurance (NHI). No study has yet estimated the extent to which PHI coverage lowers the economic burden of household access to health care. The current study intends to evaluate the design of Korea's PHI system in terms of coverage using a catastrophic health expenditure (CHE) indicator and compare it with NHI.

Methods: This study determined the difference between the number of households subscribed to PHI and the number of households that paid benefits. Also, it compared the effects of reduced CHE through NHI benefits with those of PHI. Furthermore, it compared PHI benefit rates by income class. Finally, it analyzed the benefit contribution of NHI and PHI to CHE reduction through a two-part model with hierarchical regression.

Results: Results indicated that of the 5,644 households studied, 3,769 subscribed to PHI, but only 246 households received benefits. The NHI reduced CHE incidence by 15.17%, whereas PHI only reduced CHE by 1.22%. The NHI scheme indicated reduced inequality as it provided more benefits to the low-income class, whereas the PHI paid more to the high-income class. The NHI coverage has protected households from CHE and improved equality to some extent; however, PHI coverage has had little effect on relieving CHE and has deteriorated equality.

Conclusions: Korean private insurance companies, which are mostly subsidiaries of for-profit conglomerates, only pay for pre-contracted diseases, therefore, most patients do not receive benefits. Thus, Korea's private insurance system needs to improve to provide benefits to patients more generously and alleviate the financial burden of medical use. 

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Tables

Table 1. General characteristics of samples

Variables

N (%)

Total

Insured in private health insurance

Paid benefits

Characteristics of householders

Gender

Men

4,305 (76.28)

3,051 (80.95)

193 (78.46)

Women

1,339 (23.72)

718 (19.05)

53 (21.54)

Age

< 29

187 (3.31)

90 (2.39)

13 (5.28)

30~39

676 (11.98)

454 (12.05)

52 (21.14)

40~49

1,166 (20.66)

761 (20.19)

83 (33.74)

50~64

1,727 (30.6)

1,013 (26.88)

93 (37.80)

> 65

1,888 (33.45)

1,451 (38.5)

5 (2.03)

Education

Higher than college

1,703 (30.17)

1,123 (29.8)

114 (46.34)

High school

2,185 (38.71)

1,487 (39.45)

92 (37.4)

Less than middle school

1,756 (31.11)

1,159 (30.75)

40 (16.26)

Marital status

Married

3,929 (69.61)

2,856 (75.78)

186 (75.61)

Single

1,715 (30.39)

913 (24.22)

60 (24.39)

Job type

Employee

2,430 (43.05)

1,507 (39.98)

157 (63.82)

Employer/self-Employed

1,356 (24.03)

896 (23.77)

61 (24.80)

Unemployed

1,858 (32.92)

1,366 (36.24)

28 (11.38)

Characteristics of households

Income level

5th (rich)

1,128 (19.99)

741 (19.66)

75 (30.49)

4th

1,128 (19.99)

724 (19.21)

61 (24.8)

3rd

1,129 (20.00)

695 (18.44)

71 (28.86)

2nd

1,129 (20.00)

760 (20.16)

33 (13.41)

1st (poor)

1,130 (20.00)

849 (22.53)

6 (2.44)

Private health insurance

No

1,875 (33.22)

-

-

Yes

3,769 (66.78)

3,769 (66.78)

-

Type of national health insurance

Employee

3,731 (66.11)

2,465 (65.40)

172 (69.92)

Self-employed

1,481 (26.24)

971 (25.76)

70 (28.46)

Medical Aid

432 (7.65)

333 (8.84)

4 (1.63)

Presence of disabled

No

5,037 (89.25)

3,322 (88.14)

235 (95.53)

Yes

607 (10.75)

447 (11.86)

11 (4.47)

Presence of four major diseases

No

4,259 (75.46)

2,762 (73.28)

210 (85.37)

Yes

1,385 (24.54)

1,007 (26.72)

36 (14.63)

Number. of chronic diseases (mean, S.D.)

0.567, 0.678

0.610, 0.701

0.610, 0.701

Number of samples

5,644

3,769

246

* The Pearson chi2 test between paid benefit and other characteristics results < 0.05.

Table 2. National health insurance benefits, out-of-pocket expenses, and private health insurance benefits by income quintile

Income quartile

National health insurance benefits (dollar)

Out-of-pocket expenses (dollar)

Private health insurance benefits (dollar)

 

n

Mean

S.D.

n

Mean

S.D.

n

Mean

S.D.

1st (poor)

1,096

2,375.82

4,541.33

1,096

1,209.17

1,694.55

6

1,351.0

1,755.47

2nd

1,113

2,463.50

4,362.19

1,113

1,627.60

2,106.19

33

762.11

666.34

3rd

1,106

1,925.73

3,407.04

1,106

1,566.22

1,931.47

71

864.78

1,827.95

4th

1,098

1,644.84

3,044.78

1,098

1,657.88

2,062.06

61

851.90

1,696.51

5th (rich)

1,103

1,707.51

3,559.46

1,103

1,710.57

2,150.51

75

3,643.41

9,508.58

Total

5,516

2,024.12

3,839.85

5,516

1,554.74

2,003.41

246

1,706.84

5,545.17

Exchange rate: 1dollar = Korean Won 1,146.9 (2021.08.10)

Table 3. Summary results of incidence and the positive gap of catastrophic health expenditure based on out-of-pocket expenses, total healthcare payment, and private health care payments

 

Based on out-of-pocket expenses 

Based on total health care payment

National health insurance coverage

Threshold

10%

20%

40%

 

10%

20%

40%

 

10%

20%

40%

Incidence measures


19.26%

8.03%

2.43%


34.43%

19.95%

9.53%


15.17%

11.92%

7.10%

Intensity measures


2.76%

1.52%

0.62%


10.83%

8.23%

5.48%


8.06%

6.70%

4.86%


14.39%

19.14

26.17%


31.51%

41.38%

57.84%


23.46%

33.71%

51.29%

 

Based on out-of-pocket expenses

Based on private health care payment

Private health insurance coverage

Incidence measures


19.26%

8.03%

2.43%


20.48%

8.65%

2.73%


1.22%

0.62%

0.30%

Intensity measures


2.76%

1.52%

0.62%


3.05%

1.73%

0.73%


0.28%

0.20%

0.11%


14.39%

19.14%

26.17%


14.94%

20.15%

27.62%


1.39%

2.38%

4.30%

Note:  is incidence,  is positive gap,  is mean positive gap of catastrophic health expenditure using out-of-pocket payments;  is incidence,  is positive gap,  is mean positive gap of catastrophic health expenditure using total healthcare payment rather than out-of-pocket payments;  is incidence,  is positive gap,  is mean positive gap of catastrophic health expenditure using private healthcare payments;  is incidence,  is positive gap,  is mean positive gap of national health insurance coverage,  is incidence,  is positive gap,  is mean positive gap of private health insurance coverage.

Table 4. Coverage effects of national health insurance and private health insurance on catastrophic health expenditure (hierarchical regression analysis)

 

Model 1

Model 2

Model 3

Incidence

Positive gap

Incidence

Positive gap

Incidence

Positive gap

OR

S.E.

f.

S.E.

OR

S.E.


S.E.

OR

S.E.


S.E.

Private Health Insurance coverage ()

-

-

-

-

-

-

-

-

1.467*

0.252

0.068**

0.022

National Health Insurance coverage ()

-

-

-

-

16.743***

1.762

0.936***

0.009

16.728***

1.769

0.933***

0.009

Gender (Male)

Female

1.018

0.138

-0.054

0.115

1.053

0.230

0.041

0.045

1.045

0.228

0.034

0.045

Age (< 29)

30–39

0.611

0.159

0.119

0.286

0.841

0.313

-0.088

0.113

0.830

0.309

-0.087

0.113

40–49

0.754

0.184

0.132

0.260

1.031

0.360

0.008

0.102

1.015

0.355

0.004

0.102

50–64

0.987

0.241

0.036

0.256

1.433

0.504

0.014

0.101

1.427

0.502

0.024

0.101

> 65

1.231

0.313

0.106

0.262

1.542

0.574

0.004

0.103

1.541

0.573

0.017

0.103

Education level

High school

1.485***

0.166

0.215*

0.101

1.025

0.171

0.006

0.040

1.024

0.171

0.009

0.040

(> college)

< middle school

1.089

0.111

0.111

0.100

0.914

0.134

0.001

0.039

0.917

0.134

-0.001

0.039

Marital status

(married)

Single

0.629***

0.082

-0.023

0.111

0.742

0.155

-0.075

0.043

0.741

0.155

-0.073

0.043

Job type

(employee)

Employer/self-employed

1.202

0.119

0.207*

0.088

1.024

0.153

0.005

0.035

1.020

0.153

0.001

0.035

Unemployed

1.455***

0.141

0.286***

0.082

1.159

0.175

0.018

0.032

1.155

0.175

0.017

0.032

Income level

(rich)*

Quintile 4

2.034***

0.298

0.013

0.171

1.866***

0.378

0.114

0.067

1.893**

0.384

0.126

0.067

Quintile 3

4.187***

0.586

0.136

0.159

3.196***

0.628

0.102

0.063

3.238***

0.637

0.114

0.063

Quintile 2

9.299***

1.329

0.524***

0.157

4.709***

0.975

0.205***

0.062

4.771***

0.991

0.215***

0.062

Quintile 1 

(poor)

17.057***

2.740

0.848***

0.163

6.392***

1.558

0.283***

0.064

6.489***

1.585

0.293***

0.064

Private health insurance (no)

Yes

1.159

0.104

-0.057

0.067

1.105

0.161

0.027

0.026

1.100

0.160

0.023

0.026

Type of national health insurance

(employee)

Self-employed

0.935

0.077

-0.116

0.067

0.939

0.119

0.004

0.026

0.941

0.119

0.002

0.026

Medical Aid

0.645***

0.081

0.073

0.093

0.635*

0.141

-0.188***

0.037

0.639

0.141

-0.186***

0.037

Disabled (no)

Yes

1.007

0.105

0.121

0.077

0.863

0.154

-0.017

0.031

0.861

0.154

-0.017

0.030

Four major diseases (no)

Yes

2.848***

0.225

0.386***

0.058

1.609***

0.202

0.001

0.023

1.591***

0.200

-0.001

0.023

Number of chronic diseases 

 

1.618***

0.121

0.061

0.065

1.354**

0.158

-0.012

0.025

1.365**

0.160

-0.008

0.025

Constants

0.045***

0.012

1.561***

0.282

0.022***

0.008

0.254*

0.112

0.226***

0.008

0.237*

0.112

Model fits

0.2708***

0.144***

0.6437***

0.866***

0.6443***

0.866***

*p < .05; **p < .01; ***< .001