The Korean Economic Forum
Development of Korea’s National Health Insurance System: Political Economy and Macroeconomic Considerations
Joon-Kyung Kim (KDI School of Public Policy and Management) and Jun Il Kim (IMF)Year 2021Vol. 14No. 3
Korea’s national health insurance system (NHIS), which played a pivotal role in responding to the COVID-19 pandemic, has been considered as one of the most efficient and affordable public health insurances in the world. This case study is a historical account of political economy and macroeconomic considerations involved in the development process of NHIS. Since first instituted in 1977 for workers in large firms only, NHIS has expanded rapidly and in several steps to cover the entire population by 1989 and achieve maximum risk pooling and adequate social equity by 2000. Underlying such apparent success were the government’s commitment to fiscal prudence, balanced considerations on affordability and social equity, adequate government control on health cost, and political democratization.