An experts ’ report on the future of the nation ’ s health insurance system offered an extremely grim outlook ― a 16 trillion won ( $ 14 billion ) annual deficit by 2020 even if salaried workers steadily increase their insurance premium payments . The long - term estimate by the Health Insurance Policy Institute under the National Health Insurance Corp . sounded like an answer to the opposition Democratic Party ’ s nascent “ free medical care ” policy . Whatever the suspected political motivation may be , the looming huge red figures compel the authorities and parties to work on drastic reforms immediately . The Republic of Korea ’ s universal health insurance system , which started from larger workplaces in 1977 , has been internationally touted as the model of public healthcare . Still , the system struggles under weak finance as well as increasing demand for medical care from the growing number of old people . And then there are the bad habits ; too many people go to clinics for common cold and doctors provide excessive treatment prescribing , too much medicine . The health insurance account showed a deficit of 3 . 2 billion won in 2009 and then the gap increased 400 - fold to 1 , 299 billion won ( $ 1 . 1 billion ) last year chiefly because of expanded coverage of illnesses and their treatment methods , according to the NHIC . The insurance corporation ’ s research arm estimates that the deficits will grow geometrically as the increase of revenue cannot catch up with fast rising payments to medical service providers . Expenditures will increase 3 . 3 times from 41 trillion won in 2012 to 137 trillion won in 2030 while insurance premium incomes will rise 2 . 1 - fold during the same period . Insurance payments for the treatment of old people aged 65 or above will increase from 13 . 4 trillion won next year to 32 trillion won in 2020 and to 70 . 3 trillion won ― more than a half of total expenditure . These estimates suppose no change to the current ratio of insurance coverage of diseases and no increase in insurance premiums or payments to medical institutions . If payments to hospitals and clinics rise by 2 . 5 percent annually to cover overall price rises , the total expenditures will reach 180 trillion won in 2030 . Then , even with the current 20 percent subsidy from the government , insurance premiums from employees will have to rise to 11 . 69 percent of their salary by 2030 . In order to stave off further deterioration of insurance finance , the research body recommended a set of remedies , which mostly have previously been proposed but not implemented vigorously . First of all , people who have income but are hidden as dependents of insurance subscribers should be made to pay their own insurance premiums . More taxes should be collected from the sales of tobacco and liquor , and investigation methods should be further improved to prevent cheating by dishonest medical service personnel . The Ministry and Health and Welfare needs to expedite developing better payment system for medical institutions not to allow the squandering of insurance income through excessive or unnecessary treatments . Broader and more efficient use of the DRG ( diagnosis - related group ) system can help rationalize the medical insurance business by ensuring that patients with similar illness use the same level of hospital resources , thus discouraging exceptionally high expenses . It is calculated that Korean people on average received 106 . 7 won worth of medical care for every 100 won they spent on medical insurance in 2008 while life insurance subscribers had only 64 . 6 won worth of benefits . The medical insurance finance can become healthier when people visit hospitals only when they are really sick and when doctors offer just the adequate level of treatment for the sickness .