National Health Insurance Service to Improve Premium Calculation Fairness in 2026

South Korea’s National Health Insurance Service (NHIS) is planning changes to address longstanding concerns about inequities in how health insurance premiums are calculated. The NHIS reported its ‘2026 Work Promotion Plan’ to the Ministry of Health and Welfare on February 3, 2026.

Addressing Premium Inconsistencies

Historically, health insurance premiums have been a source of frustration for some citizens. Individuals have reported premium increases despite decreases in income, triggered by asset ownership. Disparities have also arisen where individuals with similar asset levels faced significantly different premiums due to variations in their assigned grade bracket.

Focus on Regional Subscribers

The NHIS plan specifically aims to resolve ‘reverse progressivity’ in health insurance premium calculations for regional subscribers – a situation where those with fewer assets pay a disproportionately higher percentage of their income towards premiums.

Did You Know? Currently, health insurance premiums are determined by a ‘grading system’ based on asset levels.

Currently, premiums are calculated using a ‘grading system’ that assigns a grade based on asset level, with premiums determined by that grade. The NHIS plans to abolish this system in 2026 and introduce a ‘flat-rate system’ where premiums are calculated by multiplying asset value by a fixed percentage. This change is expected to lead to more rational premium calculations and alleviate the burden on those with lower assets.

Reducing Timing Discrepancies

The NHIS also intends to reduce the ‘time lag’ between income generation and premium billing. Currently, there can be a gap of 11 to 23 months between when income is earned and when insurance premiums are applied, leading to situations where individuals pay premiums based on past income, even if their current financial situation has changed.

To address this, the NHIS plans to expand its use of the latest income data from the National Tax Service for premium adjustments. The agency will also strengthen its management of ‘unbilled income’ – income that is not currently factored into premium calculations due to specific exemptions or classifications.

Expert Insight: These proposed changes represent a significant effort to align health insurance premiums more closely with current financial realities, potentially reducing financial strain on vulnerable populations and improving the overall fairness of the system.

Securing Long-Term Financial Stability

The NHIS is also pursuing legal revisions to clarify government support for the health insurance system. Historically, legal provisions regarding government funding have been temporary or unclear. The NHIS intends to hold public hearings and discussions with civic groups to reach a social consensus and secure stable government support, which it believes will strengthen the financial health of the insurance system and reduce uncertainty for citizens and businesses.

Frequently Asked Questions

What is the current issue with health insurance premiums?

Health insurance premiums have been criticized for increasing despite decreases in income due to asset ownership, and for varying significantly even among individuals with similar assets.

What is the ‘flat-rate system’ the NHIS plans to introduce?

The ‘flat-rate system’ will calculate premiums by multiplying asset value by a fixed percentage, replacing the current ‘grading system’ based on asset levels.

What is being done to address the time lag between income and premium billing?

The NHIS plans to expand its use of the latest income data from the National Tax Service to adjust premiums more quickly and accurately.

How might these changes impact the long-term sustainability of the national health insurance system?