Ⅴ. Effect of Reform in National Health Insurance Contribution Scheme:
1. Current State of Contribution Burden on Households
Data from the 1st to 7th NaSTaB (2008-2014) was used to examine the contribution burden of the national health insurance on households. In the NaSTaB data, income and health insurance contribution are investigated by individual and other survey questions related to expenditure are investigated by household. Since insurance contribution is paid by household with a distinction made between payers and dependents, this study focuses on the burden of insurance contribution on households.
First, to examine the current state of health insurance contribution burden by household, we define health insurance contribution as the ratio of contribution to income. Therefore, the contribution burden rate of a household is refers to the amount of contribution payment compared to household income. To calculate this directly, data collected at both individual and household levels was used in measuring contribution burden per household. The individual-level data contains detailed information on individual incomes, such as earned income and business income, and the payment amount of individual health insurance contribution is listed by employment status. For the calculation of contribution burden, individual gross income was calculated by adding up all kinds of income data covered in the NaSTaB by individual. As for health insurance contribution, the amount of contribution payment investigated in the data set was used. What should be noted here is that although the half of the contribution paid by employers is ultimately incident on individuals, leading to a reduction in real wages, contribution burden is calculated in this study based on the nominal amount of contribution paid by individual or household.
<Table V-1> presents health insurance contribution burden by year using household data. The household data was created by adding up individual incomes
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Longitudinal Analysis
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from the individual-level data and the payment amount of individual insurance contribution per household and linking the sum with the household-level data.
Meanwhile, the health insurance subscription type can be identified only in the individual-level data. So, we used this in classifying data into households with the employee insured, households with the self-employed insured and households with both the employee insured and the self-employed insured. Since the distinction by subscription type started from 2009, the current state can be identified by employment status from 2009. For this reason, we generated the household-level data using the 2nd (2009) to 7th (2014) NaSTaB data. As for household income, health insurance contribution by household, and contribution burden rate by household, all of them are weighted averages.
First, household income has steadily been increasing since 2009, and it reaches about 40 million KRW as of 2014. In 2014, household income posts 53.14 million KRW in the case of the employee insured and 34.41 million KRW in the case of the self-employed insured. Household income is estimated at a relatively low level of about 23.75 million KRW among households with both the employee insured and the self-employed insured or those that have changed the subscription type.
Health insurance contribution increased from a yearly average of 0.83 million KRW in 2009 to a yearly average of about 1.17 million KRW in 2014. In the households with the employee insured, the average annual amount of contribution payment was either similar to or slightly higher than the average annual amount paid by the households with the self-employed insured. However, for the households with the self-employed, the rate of contribution burden was two times as high as the contribution burden rate for the households with the employee insured.
〈Table V-1〉Current State of Household Income and Health Insurance Contribution Burden
(Unit: 10,000 KRW, Ratio) 2009~
2014 2009 2010 2011 2012 2013 2014
Household Income 4047.18 3,358.18 (46.75)
Health insurance contribution
by household 107.33 83.45
(1.40)
Contribution compared to
household income 0.026 0.029
(.001)
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Longitudinal Analysis
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<Table V-2> presents gross household income, health insurance contribution by household, and the contribution burden by household, which were calculated using longitudinal data. The sum of the average household income is the average of yearly household incomes added up per household; the sum of the average household insurance contribution is the average of yearly household insurance contributions added up per household. Household income and health insurance contribution of each year were converted to the level of 2014 using the consumer price index. The sum of the average household income for the six years between 2009 and 2014 was about 200 million KRW, and an average of 5.54 million KRW of health insurance contribution was paid.
The contribution burden rate represents the average ratio of the sum of yearly health insurance contributions to the sum of yearly household incomes per household. Average household income and average household contribution are the average values calculated by regarding the data between 2009 and 2014 one pool of cross-sectional data. As such, the contribution burden rate is estimated at 0.0263, which is slightly low when compared to the cross-sectional data.
The bottom of <Table V-2> lists the sum of household incomes and that of household contributions with only those households investigated four times or more in the NaSTaB as subjects. It is found that the sum of average household incomes is higher by 30 million KRW than the value calculated with all households as subjects, and this is because the number of investigations was high (four times or more) for the former. The sum of average household contributions stands at 6.2203 million KRW, which is also higher than the value calculated with all households as subjects. However, the contribution burden rate is slightly lower yet quite similar in the case in which all households are included, compared to those households investigated four times or more in the NaSTaB as subjects. Neither does the average household contribution show much difference between the two.
〈Table V-2〉Longitudinal Analysis (2009-2014): Gross Household Income, Health Insurance Contribution and Contribution Burden Rate
(Unit: 10,000 KRW, Ratio) Sum of
Average Household
Incomes
Sum of Average Household Contributions
Contribution Burden Rate
Average Household
Income
Average Household Contribution
All Households 20,799.99 554.19 0.0263 4,047.18 107.33
Households Investigated
4 Times or More 23,281.17 622.03 0.0262 4,019.42 107.40
Note: Converted to the price level of 2014 using each year’s consumer price index Source: Calculated by the authors using the 2nd to 7th NaSTaB data
<Table V-3> shows the result of weighted calculations where average household income, average household insurance contribution and the contribution burden rate are classified into 5 income quintiles. The respective distributions of average income, average insurance contribution, and the contribution burden rate by household are not very different from the distributions of the same variables by individual. Average income and average contribution increase as the income quintile increases, but the contribution burden rate remains fairly consistent across all quintiles. However, the contribution burden rate in Income Quintile 1 is twice that of other income quintiles, showing the possible income regressivity of the national health insurance contribution scheme.
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〈Table V-3〉Average Income, Average Insurance Contribution and Contribution Burden to Income Ratio by Income Quintile: by Household
(Unit: 10,000 KRW) Income
Quintile 2009 2010 2011 2012 2013 2014
Quintile 1
Average
Income 588.70 640.38 611.67 673.90 652.03 667.75
Average
Contribution 18.76 22.41 23.14 23.72 23.57 25.26
Contribution
Burden 0.047 0.052 0.060 0.054 0.071 0.058
Quintile 2
Average
Income 1,632.89 1,679.54 1,795.60 1,868.28 1,898.86 1,923.01 Average
Contribution 43.98 40.85 47.69 50.06 55.48 56.26
Contribution
Burden 0.026 0.024 0.026 0.026 0.029 0.029
Quintile 3
Average
Income 2,799.40 2,890.83 3115.48 3,211.32 3,275.99 3,376.66 Average
Contribution 74.80 76.58 82.29 85.22 96.01 99.80
Contribution
Burden 0.026 0.026 0.026 0.026 0.029 0.029
Quintile 4
Average
Income 4,232.35 4,325.56 4,730.57 4,883.55 5,106.70 5,246.36 Average
Contribution 107.34 105.58 122.48 132.34 149.57 157.72
Contribution
Burden 0.025 0.024 0.025 0.027 0.029 0.030
Quintile 5
Average
Income 7,938.38 8,012.31 8,868.60 9,148.98 9,801.16 9,771.90 Average
Contribution 178.36 184.73 212.90 226.66 255.51 267.59
Contribution
Burden 0.023 0.023 0.024 0.025 0.027 0.028
Source: Calculated by the authors using the 2nd to 7th NaSTaB data
[Figure V-1] Household Contribution Burden Ratio by Income Quintile
0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0
2009 2010 2011 2012 2013 2014
5분위 4분위
3분위
1분위 2분위
Source: Calculated by the authors using the 2nd to 7th NaSTaB data
<Table V-4> and <Table V-5> present average income, average insurance contribution and the contribution burden rate by income quintile within households with the employee insured and within households with the self-employed insured, respectively. The average income of households with the employee insured in Quintile 1, which the low-income class, is slightly higher than that of households with the self-employed insured in Quintile 1; on the contrary, the average income of households with the self-employed insured in Quintile 5, which is the high-income class, is higher than that of households with the employee insured in Quintile 5.
Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5
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〈Table V-4〉Households with the Employee Insured: Average Income, Average Insurance Contribution and Contribution Burden to Income Ratio by Income Quintile
(Unit: 10,000 KRW)
Income Quintile 2009 2010 2011 2012 2013 2014
Quintile 1
Average
Income 793.92 813.44 792.00 954.71 880.16 912.64
Average
Contribution 28.71 38.10 30.09 29.69 30.88 26.05
Contribution
Burden 0.048 0.058 0.045 0.031 0.036 0.028
Quintile 2
Average
Income 1,706.78 1,717.22 1,829.09 1,921.74 1,922.31 1,983.39 Average
Contribution 48.13 46.87 51.61 50.23 55.74 55.31
Contribution
Burden 0.027 0.027 0.028 0.026 0.029 0.028
Quintile 3
Average
Income 2,816.83 2,925.77 3,129.79 3,241.16 3,291.81 3,400.29 Average
Contribution 70.36 71.64 82.83 83.53 92.96 95.37
Contribution
Burden 0.024 0.024 0.026 0.025 0.028 0.028
Quintile 4
Average
Income 4,260.15 4,340.38 4,753.89 4,879.55 5,103.35 5,266.58 Average
Contribution 106.51 104.05 119.04 125.91 144.89 149.75
Contribution
Burden 0.024 0.024 0.025 0.025 0.028 0.028
Quintile 5
Average
Income 7,629.67 7,790.89 8,592.39 8,930.15 9,125.19 9,452.52 Average
Contribution 174.98 181.93 209.33 223.51 251.15 264.30
Contribution
Burden 0.022 0.023 0.024 0.025 0.028 0.028
Source: Calculated by the authors using the 2nd to 7th NaSTaB data
〈Table V-5〉Households with the Self-Employed Insured: Average Income, Average Insurance Contribution and Contribution Burden to Income Ratio by Income Quintile
(Unit: 10,000 KRW)
Income Quintile 2009 2010 2011 2012 2013 2014
Quintile 1
Average
Income 618.89 598.61 613.53 681.13 695.65 708.75
Average
Contribution 51.89 73.81 92.66 78.74 84.15 89.28
Contribution
Burden 0.138 0.197 0.267 0.191 0.275 0.217
Quintile 2
Average
Income 1,614.51 1,721.97 1,890.27 1,892.24 1,931.22 1,982.69 Average
Contribution 68.63 79.27 99.74 84.66 90.42 104.13
Contribution
Burden 0.043 0.048 0.054 0.045 0.048 0.055
Quintile 3
Average
Income 2,760.78 2,815.45 3,151.74 3,196.94 3,249.57 3,385.94 Average
Contribution 98.32 103.94 117.96 114.59 132.40 135.73
Contribution
Burden 0.035 0.037 0.037 0.036 0.040 0.040
Quintile 4
Average
Income 4,145.31 4,293.41 4,662.88 4,904.74 5,096.90 5,250.54 Average
Contribution 119.05 127.89 114.42 150.96 173.61 189.60
Contribution
Burden 0.028 0.029 0.031 0.030 0.034 0.036
Quintile 5
Average
Income 9,001.00 8,586.82 9,917.76 9,511.54 11,721.83 11,454.53 Average
Contribution 192.07 182.17 212.37 218.97 277.90 272.94
Contribution
Burden 0.024 0.023 0.023 0.023 0.028 0.027
Source: Calculated by the authors using the 2nd to 7th NaSTaB data
Effect of Reform in National Health Insurance Contribution Scheme:
Longitudinal Analysis