South Korea underfunds health insurance as deficit nears

State support stands at 14.2% of projected premium revenue.

South Korea’s national health insurance system is projected to enter a deficit this year as government financial support remains below levels mandated by law, as reported Asia Today.

Budgeted government funding for the National Health Insurance program currently sits at 14.2% of projected premium revenue, representing a 0.2 percentage point drop from last year. 

Under the National Health Insurance Act and National Health Promotion Act, statutory support is set at 20% of annual premium revenue. 

That framework allocates 14% from the general budget and 6% from the National Health Promotion Fund, which is funded primarily through tobacco taxes.

Since the financing mechanism was introduced in 2007, state funding has consistently fallen short of the 20% target. Between 2016 and 2025, cumulative government contributions were 19.4531 trillion won ($14b) below statutory requirements.

The shortfall coincides with declining fund reserves. The Health Ministry’s national health insurance plan for 2024 through 2028 indicates the program’s annual balance will turn negative this year.