South Korea's indemnity health insurance industry posted a loss of nearly 2 trillion won last year, as claims for musculoskeletal treatments such as manual therapy and extracorporeal shock wave therapy once again outpaced those for severe illnesses, widening the deficit.
The Financial Supervisory Service (FSS) said Tuesday that indemnity health insurance recorded a loss of 1.87 trillion won last year, with the deficit expanding by 250 billion won from the previous year.
Premium income rose 10% from a year earlier to 18 trillion won, driven by premium hikes and growth in new policies. But claims paid climbed 11.4% to 17 trillion won. Of the total claims, payments for covered and non-covered items amounted to 7.3 trillion won and 9.7 trillion won, respectively.
Claims for musculoskeletal treatments such as manual therapy and extracorporeal shock wave therapy — typical non-severe procedures — totaled 2.7 trillion won, accounting for 15.8% of all claims paid. That exceeded the 2.6 trillion won (15%) paid for cancer and cerebrovascular and cardiovascular diseases. Claims related to non-covered outpatient injections, including nutritional supplements, also reached 1 trillion won (6.1%). Payouts for high-cost new medical technologies surged sharply, with claims for robotic surgery and prostatic urethral lift procedures jumping 72.4% and 64.6%, respectively.
The loss ratio rose 1.7 percentage points from a year earlier to 101.0%, far exceeding the break-even point of 85%. The loss ratio had fallen from 103.4% in 2023 to 99.3% in 2024 on the back of premium hikes, but climbed back above 100%. By generation, third-generation policies recorded the highest loss ratio at 120.3%, followed by fourth-generation (115.1%), first-generation (102.3%) and second-generation (93.1%) policies.
As of the end of last year, indemnity insurance policies totaled 36.22 million. By generation, second-generation policies accounted for the largest share at 41.2%, followed by third-generation (21.6%), fourth-generation (17.7%) and first-generation (17.1%). Fourth-generation policies, launched in 2021, surpassed first-generation contracts for the first time. "We will curb excessive non-covered treatments through the successful rollout of the fifth-generation indemnity insurance," an FSS official said.
