“Lack of mid- to long-term response to integrated care finance…need to establish separate accounting and fund”

(Seoul = Yonhap News) Reporter Kim Young-shin = In response to the rapidly increasing demand for integrated care in the community due to super-aging, a proposal was made to establish a separate accounting and fund and operate integrated care finance through comprehensive subsidies based on various financial resources.

Lee Young-sook, a researcher at the Korea Institute for Health and Social Affairs, said at the '5th Community Integrated Care Forum' held by the Ministry of Health and Welfare on the 20th that such a measure is necessary to respond to the increase in demand for care.

According to the Ministry of Health and Welfare, next year's main budget for integrated care is 155.8 billion won, which is 1.7 times more than this year's budget.

Researcher Lee pointed out, "Although the total budget for integrated care has increased, the increase has only been focused on civil servant labor costs and medical support for vulnerable areas. If you look at each local government, national treasury support is at the level of the pilot project before expansion into the main project."

Integrated care finance is comprised of ▲ health insurance (National Health Insurance Corporation) ▲ central government general account, regional balanced development special account, rural structural reform special account, regional essential medical special account ▲ local governments' national treasury subsidies and general financial resources.

Regarding the financial structure, Research Fellow Lee said, "The proportion of social insurance finances is high, and it is divided into multiple accounts and funds." He added, "The growth in tax revenue is limited due to the decline in economic growth due to the decline in the working population, while welfare expenditures increase, greatly weakening the fiscal response."

Researcher Lee predicted that both health insurance finances and long-term care insurance finances will turn into deficits for the current year and reserves will be exhausted between 2030 and 2033.

The proportion of the elderly population, which was 21.6% as of this year, is expected to increase by more than 300,000 people every year from 2030 to 25.3% in 2030 and 34.3% in 2040, and the demand for integrated care is expected to increase rapidly.

Researcher Lee cited the cases of Japan and the United Kingdom, which operate integrated care finances as a fund, and proposed ways to secure financial resources such as the establishment of a special account and fund and comprehensive subsidies to respond to future increases in demand for care.

Specifically, the plan is to create a separate savings account/fund, operate it through government subsidies, and convert it to a comprehensive subsidy.

Researcher Lee mentioned the following as candidates for comprehensive subsidy funding: increase in tobacco levy and tobacco consumption tax, pension income tax, certain percentage of inheritance and gift tax, reform of special tax for rural areas, long-term value-added tax increase, fixed rate contribution to domestic tax, and increase in local consumption tax transfer ratio.

Oh Byeong-ki, a senior researcher at the Jeonnam Research Institute, said that the national subsidy distribution standards should be improved and the financial sharing between metropolitan and basic local governments should be adjusted according to changes in regional population structure, demand for care, and local financial conditions.

The Ministry of Health and Welfare has held five forums to this day to collect opinions on major policy tasks and seek improvement measures in line with the implementation of integrated care as a main project in all regions of the country from the end of March this year.