The health insurance authorities are pushing to automate the annual income adjustments for health insurance premiums, shifting away from the current system that requires subscribers to apply individually.

According to the "Major Work Promotion Status" report submitted by the National Health Insurance Service (NHIS) to the National Assembly's Health and Welfare Committee on October 20, the health insurance authorities are pursuing the implementation of a "Universal National Income Adjustment System" to enhance fairness and equity in burden-sharing.

Under the proposed plan, administrative authorities will directly acquire finalized annual income data from the National Tax Service once a year to calculate and adjust premiums. The move is aimed at preventing subscribers from intentionally dodging or delaying premium adjustments.

The target pool includes 9.08 million local subscriber households—such as self-employed individuals and freelancers—as well as 1.1 million employed subscribers with additional income outside of their regular salaries.

An analysis of all 9.08 million local subscriber households by the authorities showed that 3.94 million households experienced an increase in income and will be required to pay an estimated 3.29 trillion won in additional premiums.

Conversely, 2.32 million households saw a drop in income and are expected to receive a total of 1.80 trillion won in refunds. Considering that only 210,000 local subscriber households voluntarily applied for and received refunds last year, the number of beneficiaries is projected to expand significantly.

Subtracting the total refund amount from the newly collected premiums, the health insurance fund will secure a net increase of 1.49 trillion won. The authorities plan to channel this roughly 1.5 trillion won into supporting regional and essential medical care systems, as well as strengthening coverage for rare and severe diseases.

Current System: Based on "Income from Two Years Ago"

Employed subscribers already go through an annual settlement process. They initially pay premiums based on their wages from the previous year, and then settle the difference—either paying more or receiving a refund—every April based on actual finalized earnings.

According to NHIS settlement data for the 2025 fiscal year released last April, out of 16.71 million employed workers, 10.35 million paid an average of 219,000 won more per person, while 3.55 million received an average refund of 115,000 won.

This regular settlement brought in an additional 4.5 trillion won while refunding 800,000 won, boosting the health insurance fund by 3.7 trillion won.

However, no such regular adjustments exist for the income of local subscribers or the non-salary income of employed workers. Under the Enforcement Decree of the National Health Insurance Act, health insurance premiums levied on income are calculated using data from two years prior for January through October, and data from the previous year for November and December (pension income uses previous-year data).

This delay occurs because income data from the National Tax Service—following the global income tax reporting period in May—is only transferred to the NHIS around the end of October.

For instance, the premiums paid by local subscribers between January and October of this year reflected their 2024 income, while last year's income becomes the baseline starting next month. This structural lag has sparked ongoing fairness controversies, as premiums could not be collected promptly when incomes rose, nor could refunds be issued swiftly when incomes fell.

Will My Health Insurance Premium Go Up or Down?

Under the proposed automatic adjustment structure, local subscribers will pay more if their actual income for the year exceeds the income from 1 to 2 years ago used to calculate their premiums, and receive a refund if it is lower.

Subscribers whose businesses have recently grown or who have generated new income are likely to fall into the additional payment category, whereas those who experienced business closures or income declines without filing an adjustment request are likely to receive refunds.

For employed workers, if additional income from interest, dividends, business activities, or pensions exceeds 20 million won per year, separate premiums are levied on the surplus. Salaried workers with no secondary income will continue to undergo only the regular April settlement.

Looking Ahead

Since the system is still in the planning stages, a concrete implementation date has yet to be finalized. Because current enforcement decrees tie adjustments to subscriber applications, regulatory revisions must precede the transition to automatic adjustments.

Furthermore, because the figures of 3.94 million households, 2.32 million households, and their respective monetary totals are based on NHIS estimates, individual burdens and refund amounts may vary depending on the actual settlement criteria adopted.

Even before the system changes, income fluctuations can still be reflected through application. If your income has decreased or increased, you can apply for a premium adjustment or settlement via the NHIS website, the mobile app "The Health Insurance," or at your local NHIS branch.

If you have already reported business suspension or closure to the National Tax Service, you can apply online without submitting additional paperwork. Additionally, any lump-sum premium arrears resulting from adjustments can be paid in installments of up to 12 months.

[Copyright (c) Global Economic Times. All Rights Reserved.]