Projecting the Cost of Long-Term Care Insurance in Korea

Abstract

These days aging population is a common phenomenon in most countries in the world. As a result, many countries are making great effort to improve the quality of life of elderly people after retirement. A long-term care insurance system is one of the products of those efforts. In the middle of year 2008, long term care insurance as a form of social insurance was introduced in Korea and has been providing various services for people who need assistance with daily living activities. A myriad of opinions from various perspectives such as finance and quality have been suggested for improvement of the system. In order to resolve problems and to reflect suggestions for the purpose of developing the system, the future demand and cost needs to be carefully estimated. Also, various important decisions associated with the insurance policy should be based on the results of the projection. This paper provides a case study of public long-term care insurance in Korea and discusses methods to make projections on the future costs of long-term care insurance.

Searching for a Balance of Responsibilities: OECD Countries' Changing Elderly Assistance Policies

“…In Japan, everyone who uses LTC services pays a 10% user fee, regardless of income, although poor beneficiaries are subsidized (32). South Korea requires a 15% copayment for home-based care and a 20% copayment for nursing home care (35). In most European countries, cost-sharing requirements are income-based and can be substantial, particularly because "hotel" or roomand-board expenses connected to nursing home care are typically not considered part of LTC services.…”

“…Japan and South Korea's LTC social insurance programs operate as standalone programs, although they are managed by the same government levels that manage health insurance. In Japan, municipal governments are in charge, whereas in South Korea the National Health Insurance Corporation manages both insurance programs and local governments do not have an administrative role (6,35,54).…”

Long‐Term Care Insurance Adoption in East Asia: Politics, Ideas, and Institutions

“…The MHW promoted the LTCI because, like health insurance, it would be under its control, enlarging its power and capacity (Kim and Choi ; Kwon ). Similarly, the NHIC supported the LTCI, seeing it “as an opportunity to extend its own operation and mitigate against the pressure of downsizing/employment adjustment within its own organization” (Kwon , 28). Being wary of introducing new taxes, the MFE was worried that the additional financial burden “will have a negative effect on the economy facing fierce global competition” (Kwon , 133) and favored an LTCI (Chon ; Kim and Choi ; Kwon ).…”

Health-Care Reform in Korea

“…Benefits are provided as services, rather than cash, except where long-term care facilities are unavailable (Kwon, 2009a). The proportion of elderly receiving benefits increased from 1.4% when the LTCI was introduced to 4.4% in April 2010.…”

“…14 The introduction of the LTCI has spurred a substantial expansion in the supply of long-term care for the elderly, particularly by the private sector (Kwon, 2009a). The number of long-term care facilities jumped from 534 at the end of 2005 to 2 455 by the end of 2009, boosting capacity to almost 85 thousand persons.…”