Indemnity medical insurance sold by private insurance companies is called ‘second health insurance’. Insurance companies will launch a new product, ‘4th generation’ indemnity insurance, on the 1st of next month. It is characterized by the fact that the premium of the indemnity insurance varies depending on how many uninsured treatments are received that are not covered by the National Health Insurance (insurance premium differential system). If you take a lot of insurance money from your disability insurance due to uninsured treatment, you will have to pay more. Otherwise, customers may receive a discount on insurance premiums.
15 4th generation indemnity insurance to be launched tomorrow
Insurance is cheap but not covered
If you take a lot of non-insurance insurance, you have to pay more
If you go to less hospital, consider changing
According to the Financial Services Commission on the 29th, 15 insurance companies will introduce the 4th generation indemnity insurance on the 1st of next month. Of these, 10 are non-life insurers and 5 are life insurers. New customers have no other choice but to purchase only the 4th generation indemnity insurance. Existing indemnity insurance subscribers can choose one of the two. Maintaining the existing indemnity insurance and switching to the 4th generation indemnity insurance.
The FSC said that the premium of the 4th generation indemnity insurance is lower than that of existing products. However, there may be differences in the scope of coverage between existing products and the 4th generation indemnity insurance. An insurance industry official, who requested anonymity, said, “(Existing indemnity insurance) premiums are rising sharply every renewal cycle. You should seriously consider changing trains in consideration of your health, etc.”
According to the insurance industry, if you frequently visit hospitals and clinics and receive a lot of non-covered treatment, it may be better to maintain the existing indemnity insurance. In particular, the indemnity insurance products sold by insurance companies until September 2009 are advantageous for those who frequently visit hospitals and clinics because there is no co-payment for customers.
For 4th generation indemnity insurance, the self-pay ratio may increase. This means that even if insurance is claimed after receiving the same treatment, the customer will pay more than the existing product. In the case of medical treatment (paid treatment) covered by the National Health Insurance, the self-pay rate of the 4th generation indemnity insurance is 20%. Compared to existing products (10-20%), the maximum increase is 10% points. In the case of medical treatment not covered by the National Health Insurance (non-insurance treatment), the self-pay rate of the 4th generation indemnity insurance is 30%. Similarly, compared to existing products (20-30%), it increases by up to 10% points.
The 4th generation indemnity insurance is divided into five classes according to how much insurance money the customer has received from non-covered medical care in the previous year. Depending on this level, special insurance premiums are discounted or increased. If there is no insurance received from non-insured treatment, the special insurance premium is discounted by around 5%. If the amount of insurance received from non-insured treatment is 3 million won or more, the premium for special insurance increases by 300%.
Uninsured medical expenses can vary widely from hospital to hospital. You can check how much non-covered medical expenses each hospital receives on the Health Insurance Review and Assessment Service website. For example, the cost of treatment for manual therapy ranges from a minimum of 5,000 won to a maximum of 600,000 won.
The 4th generation indemnity insurance applies strict requirements when a customer claims insurance for hydrotherapy or nutritional supplements. Each time you receive manual therapy, you need to confirm that your symptoms have improved with an ultrasound examination to pay additional insurance money. The number of annual coverage for manual therapy is 50 times, and the limit of insurance money is 3.5 million won, the same as the existing products.
The 4th generation indemnity insurance does not pay insurance if the customer receives nutritional supplements or vitamins for the purpose of supplying nutrition or relieving fatigue. For example, if a cold patient receives a so-called ‘Cinderella injection’ (drug name: GCI), it is excluded from the insurance payment.
Based on a 40-year-old male, the average premium for the 4th generation indemnity insurance is 11,82 won. The premium is 10~70% cheaper than the existing indemnity insurance. In the future, there is a possibility that the premium difference between the 4th generation indemnity insurance and existing products will widen further. Customers who signed up for disability insurance a long time ago may have reached an age where they often visit hospitals and clinics as they get older. Such customers may be at a disadvantage in switching to a new product. An insurance industry official, who requested anonymity, said, “Insurers who use less hospitals and have reduced incomes may consider switching.”
Life insurance companies that are launching the 4th generation indemnity insurance are Samsung, Hanwha, Kyobo, Heungkuk, and NH Nonghyup Life. On the other hand, Mirae Asset, Dongyang, and ABL Life gave up on launching the 4th generation indemnity insurance. This is because it was judged that the loss ratio of indemnity insurance could be a bad business in a situation where the loss ratio was high. Lee Dong-yeop, head of the insurance department at the Financial Services Commission, explained, “There are aspects of small and medium-sized companies that have difficulty in lowering their business costs due to low capital or economies of scale.”
By Hyo-seong Ahn, staff reporter [email protected]