National Health Insurance Medical Fees to Rise 1.65% Next Year... KMA Negotiations Collapse

Additional 1.2058 Trillion Won Required for National Health Insurance Fund

Next year, the average National Health Insurance medical fee rate will increase by 1.65%. However, negotiations for clinics broke down as the gap in the proposed rate hike between subscribers and providers could not be narrowed.

Provided by the National Health Insurance Service

The National Health Insurance Service announced that it completed negotiations on the 2027 reimbursement contract with seven organizations, including the Korean Medical Association, and that the results were reviewed and approved at the Financial Operation Committee meeting on the 30th.

Medical fee rates refer to the compensation paid by the government from the National Health Insurance fund to medical institutions for providing healthcare services. The rate is calculated by multiplying the 'conversion index' by the 'relative value score' set for each individual medical act.

The average fee increase for next year, as approved on this day, is 1.65%, with a 1.45% rise in the conversion index and a 0.20% increase in the relative value-linked portion.

The rate increase by type of healthcare institution is as follows: hospitals 1.2% (long-term care and psychiatric hospitals 1.3%), dental clinics 2.6%, Korean medicine clinics 3.0%, pharmacies 3.7%, and midwifery centers 6.0%.

Hospitals and Korean medicine clinics received an additional 0.1% for the relative value-linked portion, while dental clinics received 0.2% more. The intention was to provide more compensation to those who had been relatively undercompensated. For hospitals, the additional amount will go to essential medical services and undervalued items, while for dental clinics and Korean medicine clinics, it will be allocated mainly to consultation fees and similar categories.

In this round of negotiations, the National Health Insurance Service proposed a 1.6% increase (1.1% rise in the conversion index and 0.5% in the relative value-linked portion) for clinics, but no agreement was reached. In last year's negotiations, all seven medical and pharmaceutical organizations reached an agreement for the first time since 2018.

Immediately after negotiations broke down, the Korean Medical Association issued a statement condemning the outcome, saying, "We could not accept the lowest-ever additional budget (band) and fee rate increase, which does not even match the inflation rate," and added, "The rate proposed by the National Health Insurance Service is a complete disregard for the harsh reality faced by primary care, and an irresponsible decision that shakes the very foundation of healthcare."

As negotiations broke down, the conversion index for clinics for 2027 will be determined by the Health Insurance Policy Deliberation Committee. The Financial Operation Committee, while reviewing and approving the negotiation results, recommended that the National Health Insurance Service not exceed the final proposed rate of 1.6% in order to maintain fairness with other organizations.

The National Health Insurance Service explained that, in light of concerns over the National Health Insurance's financial deficit, they set the fee rate band after comprehensively considering the sustainability of the system, including the need to maintain the healthcare infrastructure, subscribers' ability to pay, and the impact of fee increases on insurance premiums.

In addition, under the 2nd Comprehensive National Health Insurance Plan (2024–2028), efforts to strengthen essential medical care and alleviate fee imbalances led to an expanded application of the conversion index-relative value linkage, which had previously applied only to hospitals and clinics, now also encompassing dental and Korean medicine clinics from this year's negotiations for the 2025 reimbursement contract.

Namhoon Kim, Executive Director of Benefits at the National Health Insurance Service, said, "Negotiations were held amid mounting societal concerns about the financial soundness of the National Health Insurance, driven by increased medical costs due to the entry into an ultra-aged society, large-scale fiscal expenditures to strengthen regional, essential, and public healthcare, and the weakening of the insurance premium revenue base."

The additional National Health Insurance expenditure required due to this fee increase amounts to 1.2058 trillion won (with 148.7 billion won allocated for the relative value-linked portion). As the financial burden increases, health insurance premiums could also rise. Since the National Health Insurance Service pays medical providers using premiums collected from subscribers, the outcome of the fee negotiations directly affects the level of premium increases.

This content was produced with the assistance of AI translation services.