Should the Wealthy Pay Up? Exploring the Pros and Cons of Mandatory Health Insurance for High-Income Daily Workers

There are also foreigners who earned over 900 million won and paid 0 won… Purpose of improving equity

The government is pursuing a plan to impose health insurance premiums on daily earned income. The purpose is to improve the sustainability of health insurance finances and increase burden fairness.

Health insurance authorities such as the Ministry of Health and Welfare and the National Health Insurance Corporation announced on the 4th that they are considering a plan to impose insurance premiums on daily earned income. Daily work refers to a form of work in which workers provide labor to the same employer for less than three months and receive daily or hourly wages.

Under the Health Insurance Act, health insurance premiums are levied on interest income, dividend income, business income, and earned income. Since daily earned income is also classified as earned income under the Income Tax Act, it is, in principle, subject to health insurance premiums. However, in Korea, insurance premiums were not charged on daily wage income due to the strong perception that it was the wage of low-income and vulnerable groups.

When the Ministry of Health and Welfare announced the ‘Second National Health Insurance Comprehensive Plan’ last February, it focused on temporarily paying health insurance premiums such as ‘interest and dividends’ as a way to expand insurance premiums. There was also talk of exploring the imposition of insurance premiums on new income to stabilize health insurance finances, but it did not specify daily earned income. However, as the level of daily earned income has recently risen and issues of equity have been raised, it has been decided to deduct insurance premiums from daily earned income as well.

Last year, the number of workers with annual daily income exceeding 50 million won was 337,763, and the total income amounted to 22.66 trillion won. There were 458,678 foreign workers and their income was 9.0961 trillion won. An official from the Ministry of Health and Welfare said, “Daily earned income varies from low to high income, and there have been many points out that health insurance premiums are not levied on all daily earned income.” He added, “There are many areas to discuss, such as setting standards for at what income level insurance premiums will be imposed. “We will now proceed with the review,” he said.

The fact that foreign daily workers enjoy exemptions also influenced the need to supplement the system. According to the data on the status of high-income daily workers compiled by the National Health Insurance Corporation, foreigner A earned 980 million won in daily wage income, but did not pay a single penny in health insurance premiums. Mr. B, a foreigner, earned 300 million won in daily wage income, and his business income also reached 160 million won. The health insurance authorities were unable to collect insurance premiums for daily earned income of 300 million won.