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Complaints from subscribers who were recently bombed by the increase in real-life insurance premiums are growing. Insurance companies say that the amount of medical use has decreased, but questions are rushing to ask’why does the premium increase occur?’ Insurance companies argue that the cause is’excessive insurance spending by a small number of subscribers’. It is explained that insurance payments have rather increased as excess medical care related to non-payment for some subscribers and medical workers has increased.
According to the insurance industry on the 27th, as of the third quarter of last year, the amount of real-life insurance insurance payments (accrued damages) of the non-life insurance industry was totaled at 7,4745 billion won. It was 10.7% higher than the previous year’s 6.75 trillion won.
As insurance payments increased, so did the amount of losses. The amount of loss is the amount of loss incurred (insurance) minus the’risk insurance premium’ excluding operating expenses from the insurance premium paid by the subscriber. In the third quarter of last year, the loss of real-life insurance was KRW 1.738.3 billion, an increase of 9.2% from the previous year. The loss ratio was 130.3%, an increase of 0.6% from the previous year. At this rate, the total loss last year is expected to exceed 2 trillion won.
The insurance industry points to’expanding claims for unpaid medical expenses by clinic-level medical institutions’ as the reason for the increase in loss of real-life insurance last year. Non-payment refers to treatment that is not covered by health insurance, and it is known that medical institutions can set a price arbitrarily.
In fact, according to the Korea Insurance Research Institute, the unpaid medical expenses of clinic-level hospitals are increasing by an average of 20% per year. In the first half of last year, the amount of unpaid medical insurance claims for clinic-level hospitals was KRW 1,153 trillion, up 22.3% from the first half of the previous year and 79.7% from 2017. This is in contrast to the 3.4% decrease in unpaid care in advanced general hospitals over the past three years.
In particular, claims for unpaid medical expenses related to musculoskeletal and eye diseases have increased significantly. Musculoskeletal disorders include manual therapy and spinal MRI. Claims related to musculoskeletal disorders accounted for 41% of all insurance claims, and among eye diseases, claims related to cataracts surged.
In addition, the insurance industry explains that even a small number of subscribers who receive treatment hundreds of times each year are increasing the loss ratio of indemnity insurance.
According to the Korea Insurance Research Institute, the number of recipients who receive an average of 1 million won per year among all real-life insurance subscribers based on hospitalization is 2~3% of all subscribers. The top 1% of all claimants received an annual average of 20 million won, and the insurance money they received accounted for 15% of the total. In terms of outpatient hospitalization, 9% of the recipients exceeded 300,000 won. The top 1% of claimants received an average of 5 million won per year. In particular, some of the outpatient therapists have claimed insurance benefits after receiving more than 800 outpatient treatments during a year for minor illnesses such as gastritis, sprains, headaches, and low back pain.
Insurance companies are continuing to recommend the management of unpaid care to the government to normalize real-life insurance. In addition, insurance fraud detection using real loss insurance is underway. However, it is not enough to manage it completely.
Research Fellow Chung Seong-hee of Insurance Research Institute said, “Although the reorganization of indemnity insurance is underway, its effectiveness will be significantly reduced if the management of indemnity insurance and non-payment is not properly carried out.” The key is to manage the total amount of medical expenses.