Mr. A, a Chinese man in his 70s, came to South Korea in July 2020 to treat liver cancer. He registered with the national health insurance as a dependent of a family member living in Korea immediately upon arrival. During his year-long stay, he received 64 medical treatments at Korean hospitals, with the National Health Insurance Service (NHIS) covering costs amounting to $37,000 (50 million won). After completing his treatment, Mr. A returned to China in July 2021.
In 2020, Mr. B, a Vietnamese national in his 50s, arrived in Korea and enrolled in health insurance as a dependent under his son-in-law’s plan. He returned to Vietnam after receiving treatment for liver disease and other chronic conditions. The total cost covered by the NHIS for his treatment over a year amounted to 90 million won.
These foreigners are the so-called “free riders” exploiting Korea’s health insurance system. Since they are eligible for health insurance as dependents of a family member who resides in Korea, they do not pay any health insurance premiums. They only visit Korea to receive “short-term intensive treatment” when they fall ill and return home once the treatment is over. The loophole in the system allows these foreigners to enroll in health insurance upon entering the country, as long as they qualify as dependents of an individual enrolled in the employment-based health insurance plan.
But all this is about to change. Korea recently tightened the criteria on national health insurance coverage for dependents of foreign nationals to close the loophole in the system. Dependents of foreign nationals and Koreans living overseas will be required to reside in Korea for at least six months to qualify for health insurance coverage, according to the revised National Health Insurance Act, which takes effect from April 3.
The government hopes to curb the number of “free riders” that take advantage of the system. Foreigners who live in Korea for less than six months will no longer qualify as dependents, which is expected to reduce the number of foreigners receiving health benefits by about 10,000 per year. “This measure is expected to save around 12.1 billion won in health insurance expenses annually,” said a government official.
Parents, siblings, and college-aged offspring of foreigners employed by local firms must wait six months before qualifying as dependents.
However, spouses and minors under 19 and those holding residency statuses for marriage, permanent residency, or study purposes can register as dependents upon arrival and access health benefits without delay. This measure is intended for the families of diplomats and expatriates of foreign companies.
Previously, foreign in-laws and mothers-in-law of Korean employees could register as dependents as soon as they entered the country to receive health benefits. There were many cases where foreign in-laws were brought to Korea for medical treatment and then sent back home. But as of April 3., these individuals must also stay six months to qualify as dependents.
According to the NHIS, approximately 1.46 million foreigners had registered for national health insurance by the end of 2023. Chinese nationals accounted for about 700,000 (48%) of these foreigners, followed by Vietnam (150,000), Uzbekistan (70,000), and Nepal (50,000).
Regarding health insurance subscription type, regional enrollees were predominant, making up 46% of the total, with those registered through employment accounting for 41%, and dependents of these workers comprising the remaining 13%.
The government hopes to reduce “free riding” cases with the revised health insurance law. “The aim is to prevent a small number of foreigners from exploiting the system,” said a NHIS official.
