Issues associated with the use of National Health Insurance contributions in determining public policy program beneficiaries

ABSTRACT

Scholars, practitioners, and policymakers agree that the eligibility criteria used for determining welfare benefit recipients must be efficient, equitable, and possess few measurement errors. This study analyzes Korea’s system of using contributions to the National Health Insurance as an eligibility criterion for determining welfare benefit recipients and evaluates whether the system has these aforementioned characteristics, using the case of the COVID-19 stimulus payment distributed in the city of Jeonju. The analysis shows that while the system is favorable from an efficiency perspective, it is less desirable in terms of the other two characteristics. Based on the findings, this study proposes using tax return and employment insurance data, as such databases can help solve the equity and measurement error issues associated with the use of the current system.

KEYWORDS:

• Policy beneficiary
• policy eligibility
• efficiency
• equity
• measurement error

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Every person must pay the insurance premium regardless of age under the KNHI system, unlike the national pension system in Korea, in which contributions are no longer paid after the age of 60 years.

2. Table 1 shows the NHI contribution system as of July 2018 and July 2022. The contribution system is scheduled to change starting from July 2022.

3. There are certain eligibility requirements that must be met for a person to be insured as a dependent by a family member. For example, a person cannot be claimed as a dependent if they earn more than KRW 34,000,000 annually or have a business income of more than KRW 5,000,000 annually. If a person does not satisfy these requirements, they cannot be claimed as a dependent. If this person is not hired and operates their own business, they have to pay the insurance premium as a locally-provided policyholder. Hence, a household with two or more family members may have both employer- and locally-provided policyholders.

4. NHI premium data at the national level are unavailable for the bottom 25th percentile.

Additional information

Notes on contributors

Hosung Sohn

Hosung Sohn is an Associate Professor in the School of Public Service at Chung-Ang University. His research area is public finance, demography, and program evaluation using experimental and quasi-experimental research designs.

Namho Kwon

Namho Kwon is an Assistant professor at the Department of Public Administration at Soongsil University, South Korea. His research interests include policy evaluation, technological innovation, and regulatory policy.