The reform follows in the path of Israel (1980), Germany (1995), Luxembourg (1998), Japan (2000), Singapore (2002), France (2004) and Spain (2007). This Korean development further confirms the reported international trend towards the introduction of long-term health care insurance, primarily to help the insured cope with the loss of independence as a result of old age or disability.
The introduction of this new branch of Korean social security is a response to major shifts in Korean society, including a rapid ageing of the population. Demographers predict that the proportion of the Korean population aged 65+ will rise from its current level of 9.1 per cent, to 11.0 per cent by 2010, 15.6 per cent by 2020, and 24.2 per cent by 2030. At present there are nearly five million Koreans aged 65+, of which no less than one million suffer from dementia or cardiovascular disease.
Significant social changes also lie behind this development. The breakdown of traditional family structures, loosening of community ties and the emergence of non-typical or re-formed models of the nuclear family, along with an increasing level of female employment, have meant that the traditional “safety net” provided by the Korean family has been stretched to breaking point.
Consistent with a rapidly ageing population, Korea has experienced major increases in health care expenditure for the elderly. According to recent data, health-care costs related to the treatment of geriatric conditions have increased by 192.5 per cent between 2002 and 2007 (see Table). Part of this increase stems from an inappropriate use of health-care resources, not least because many elderly persons with chronic conditions stay in acute-care hospitals instead of long-term care facilities.
The absence of a national system of health care for the elderly in Korea has added to the burden placed on families with elderly members. Sadly, it has not been uncommon for elderly relatives to be abandoned by their families. Significantly, an estimated 63 per cent of elderly people in need of support receive no care or assistance.
The Republic of Korea has chosen the route of national solidarity to fund the new system, as is also the case for their health insurance scheme. Thus all contributors to the National Health Insurance (NHI) scheme pay a certain contribution in addition to their NHI contributions: currently a sum equivalent to 4.05 per cent of their NHI contribution. This means that the insured persons of the NHI programme are the same as the insured persons of the new system. The central government, for its part, pays subsidies equal to 20 per cent of anticipated contribution receipts. Beneficiaries pay an out-of-pocket contribution of between 15 per cent of the cost for in-home services and 20 per cent for care in institutional services. The out-of-pocket payment is halved for beneficiaries of the Medical Aid programme and certain categories of people with low income and low-value property assets, and it is totally waived for beneficiaries under the National Basic Living Security Act.
However, one factor may hamper the fledgling system’s development in the short term: a shortage of qualified care workers and facilities. About 250,000 applications for long-term care have been recorded up to the end of July 2008, out of which 165,000 have been assessed as corresponding to one of the three categories in which applicants will get the long-term care services. Faced with this growing demand, it is imperative that the State provides sufficient care facilities and supports efforts to train more care staff.
Long-term care services comprise in-home services, institutional services and cash benefits.
The range of in-home services covers home-visit care designed to help the elderly person in his or her activities of daily life: including bathing, toileting, dressing, cooking, cleaning, shopping; home-visit bathing services in the shape of a vehicle fitted with a portable bath to provide the service at home; home-visit nursing to give care and treatments prescribed by a physician, an oriental doctor or a dentist; day and night care (including functional therapy and medical treatments) given for short periods in residential facilities providing geriatric care; short-term respite care in long-term care welfare facilities for the elderly on occasions when the family member who looks after the elderly person is not available. Certain items of medical or orthopaedic equipment are also made available to elderly persons, including, for example, wheelchairs and orthopaedic mattresses.
These services include long-term care in long-term care facilities, licensed nursing homes, retirement homes and licensed residential establishments.
Cash benefits are designed to help elderly people and their families with the costs of health care when the beneficiary lives in a remote region or on one of the country's islands which have few facilities for long-term care. They are also given to persons who need care but whose physical, mental or psychological condition makes them unsuitable for admission to a long-term care establishment. They can also be used to meet part of the cost of long-term care provided at home or in an institution by a non-registered service provider. This partial coverage of costs may also apply to lengthy periods of residence in geriatric care facilities.
The National Health Insurance Corporation (NHIC), which is the only social health insurer covering the entire Korean population of about 59 million people, is also responsible for managing the new system, while general supervision is provided by the Ministry for Health, Welfare and Family Affairs. The "Long-Term Care Needs Certification Committee" examines the case files, makes visits to assess need and, on the basis of the information collected and the doctor's opinion, issues "Long-Term Care Certifications" to applicants whose confirmed loss of the ability to perform the essential tasks of everyday living independently has lasted for at least 6 months. The certification, together with a “Standard Long-Term Care Utilisation Plan”, is forwarded to the beneficiary by the NHIC.
The Long-Term Care Needs Certification Committee operates at city, county and municipal level. It consists of 14 members and a chairman and it includes health and social security professionals.
Assessment is based on two criteria:
1. the physical condition of the applicant, including his or her physical and mental functions and the nursing and rehabilitation care which his or her situation requires;
2. the degree of the applicant's dependence for the essential tasks of everyday living, taking into account his or her living conditions and environment.
Three categories of dependence requiring long-term care are defined:
Category 1: The elderly person has one of the following handicaps: he or she cannot go to or get out of bed unaided; suffers behavioural difficulties, impaired judgment and frequent memory loss as the result of severe brain injury; or needs full assistance with all the activities of daily life.
Category 2: The elderly person cannot feed or dress himself or herself unaided; impaired judgment and memory loss due to dementia.
Category 3: The elderly person needs some degree of help in feeding, dressing and looking after himself or herself, performing household tasks and in his or her everyday activities outside the home.
The Long-Term Care Certification indicates the category to which the beneficiary of long-term care belongs. It also states the length of time for which care will be given.
The Standard Long-Term Care Utilisation Plan contains details of the beneficiary's entitlement to care services and benefits and what these cost.
The new system, launched in July 2008, was implemented after three trial periods during which pilot programmes were introduced in selected areas of the country. The third period ran from 1 May 2007 to 30 June 2008.
In introducing long-term care insurance for the elderly the ROK Government hopes to achieve a number of objectives, namely:
- better health and a better quality of life for the elderly;
- an easing, through social solidarity, of the burden on families which include elderly relatives;
- slowing down national health-care expenditure by rationalizing the use of health-care resources through encouraging the elderly with chronic conditions to use long-term care facilities other than high-cost acute care hospitals;
- freeing up members of families who look after elderly relatives so that they are better able to participate in economic activity;
- the creation of new employment opportunities, including jobs for paramedical personnel and social workers.
Developments in the Republic of Korea and elsewhere suggest that the trend toward the introduction of long-term care insurance is slowly but surely gathering pace. This is further confirmed by the fact that other countries, especially in Europe, are also investigating the feasibility of doing likewise. As the global phenomenon of population ageing becomes more pronounced and the perceived need for long-term care insurance grows there is little doubt that the Republic of Korea will sit among a small but growing group of countries for others to observe and learn from.