South Korea will see a significant change in the process of claiming health insurance benefits, with individuals being able to receive their actual medical expenses without submitting paper medical certificates.

This transformation comes as a result of amendments to insurance laws aimed at streamlining the process for claiming medical expense coverage, which have passed through the legislative review committee in the National Assembly after 14 years.

With this development, over 300 billion won ($224 million) worth of unclaimed insurance benefits will be disbursed annually.

A bill designed to streamline claims for medical expense insurance passed the National Assembly’s Legislation and Judiciary Committee on Thursday and went to the plenary floor.

Despite the ongoing opposition from medical practitioners, the industry is confident that the advantages for the vast majority of the population are evident, increasing the likelihood of a seamless implementation of this new system.

Should it be put into effect, this system would eliminate the necessity for 39.77 million policyholders with medical expense insurance to personally visit medical facilities or insurance companies to file claims.

This, in turn, would result in annual savings of over 4 billion paper certificates and a reduction in the associated administrative fees paid to hospitals and clinics.

The amended law will take effect one year from the date of promulgation for hospitals and two years for clinics, or medical facilities with fewer than 30 beds.

This grace period is necessary for individual medical institutions, intermediaries, and insurance companies to establish the necessary data transmission systems.

However, challenge remains in determining the intermediaries responsible for transmitting sensitive individual medical records.

Medical professional groups vehemently oppose the Health Insurance Review & Assessment Service’s access to non-reimbursable medical treatment records as a potential intermediary. While Korea Insurance Development Institute has been suggested as an alternative, no final decision has been made.

Typically, medical expense insurance benefits can be claimed retroactively up to three years. If the simplification of claims is implemented starting with hospitals in October next year, policyholders will be able to claim medical expenses from October 2021 onward with just a few clicks.

However, an insurance company official cautioned that data discrepancies between different healthcare institutions could necessitate paper document submission as in the past for data not transmitted electronically.

The insurance industry is generally welcoming the changes. While they will have to pay out an additional 300 billion won in insurance claims a year, it is better to reduce the administrative burden and cost associated with paperwork.

By Shin Chan-ok and Minu Kim

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