Press Release
Health and Welfare Forum, December, Published
- Date 2023-02-07
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KIHASA has published Heath and Welfare Forum, December, No. 314.
Foreword: "Demographic Changes and Social Security Finance," Kim Yong-ha, Professor, Soonchunhyang University
Considering the current proportion of its elderly population, Korea is expected to become the world's oldest country in the early 2050s, surpassing Japan, the current number one in the world. Pessimists have already drawn a gloomy picture about Korea's future, citing a study by Oxford University that predicted the extinction of the Korean people by 2750. According to the fourth National Pension Fund financial estimate in 2018, Korea's national pension fund would be completely depleted by 2057. Health insurance finances are also a problem. According to the "Long-term Projection of Health Insurance Finance 2020-2060," accumulated deficits of the National Health Insurance would amount to 678 trillion won in 2040, 2,518 trillion won in 2050, and to a whopping 5,765 trillion won in 2060. The rate at which the expenditure for long-term care insurance is increasing is even higher. It is almost impossible to defy the demographic changes now. Therefore, rather than just worrying about such changes, it would be best for us to start finding ways to adapt ourselves to the changes. In other words, the priority is to restructure the country to be sustainable so as to weather its low birth rates and an aging population. The socioeconomic programs created during the population expansion period should be altered to fit a shrinking population. It is also urgent to bring to reform public pensions including the National Pension and social insurances such as the National Health Insurance and Long-term Care Insurance to make them population-neutral. In the era of low growth, it is important to adopt a workable development strategy, putting more weight on long-term sustainability than on short-term goals. Constant innovation at the corporate level is important to escape the swamp of low growth, but until it becomes a visible trend in the economy, it is more important to transform the entire economic and social systems into low-cost and high-efficiency ones. Welfare programs should also be changed as low-cost and high-efficiency ones. Also, it is necessary to bring a financial balance to social security finances in order to solve the problems posed by demographic changes, in solving these problems, it is more important to increase the sustainability of the national system as a whole. I hope the policy ideas raised in this forum will be discussed in depth. |
Article I: "Social Security Financing with Population Ageing," Park, Soeun, KIHASA
According to the 2022 Elderly Statistics, Korea is expected to become a super-aged society by 2025. This article examines public social welfare expenditure, national tax burden, and national debt ratio for countries that have already transitioned to a super-aged society. Also, I look at the current status and the long-term outlook of Korea’s social security financing, focusing on old age policies. Although the study shows that Korea has the financial capacity to respond to the super-aged society, more active policy responses are required, given that our society is rapidly aging. We need to identify an integrated financial situation on social insurance, and discuss its fundamental and structural issues.
Article II: "Some Issues on the Financial Estimate of Public Pension," Shin, Hwa-yeon, KIHASA
Public pensions, such as the national pension, regularly carry out fiscal calculations to check their financial status in advance. The financial calculation is implemented, but the pension law only mentions financial balance, and fiscal goals are not specified in detail. As a result of the financial estimate, only the fiscal balance deficit and fund exhaustion are attracting attention. The original purpose of improving the pension system based on the financial projection results has not been achieved. In this study, the current status is reviewed and a task is proposed to prepare for the financial estimate of the public pension.
Article III: "The Characteristics of Child Welfare Finance Management and Developmental Improvement Measures," Lee, YoungSook, KIHASA
As the total fertility rate declines to a level that threatens the socio-economic system, support for child rearing and the realization of child welfare are becoming the centerpiece of the national agenda. In this study, based on OECD statistics and analysis of central government budget data as of 2021, I examined the characteristics of Korea's child finance management and derived some improvement measures. Our analysis of the central government's child welfare finance found that current child welfare programs are multi-ministerial and segmented by age and characteristic groups, nationally subsidized but without sufficient level of legally mandated subsidization, and focused on child care support for children in early childhood. In order to improve the efficiency of child welfare finance and the effectiveness of policy implementation, improvement measures can be sought for improving the governance of child policies, systematizing and optimizing the state subsidy rate for projects for children, returning part to central government projects, and establishing a support system for the entire life-cycle of children. In addition, policy makers may consider returning the financial capacity generated by the reduction in the number of children or improved efficiency to child welfare finance, and an appropriate allocation of resources by the Education Finance Division for school-age children.
Article IV: "The Current Status and Implications of the Elderly Long-term Care Policy in Korea," Choi, Hyejin, KIHASA
Korea's elderly population will further increase in the coming decades, and so will the socioeconomic demand for their care. The amount of care services has increased with the introduction of the long-term care insurance, the expansion of the long-term care hospitals, and the elderly care system in the local community. As a result, the long-term care spending, reflecting the demographic structure, reached the OECD average level. However, the coverage level remains low in terms of spending. One of the major cause of the financial inefficiency is the high level of “social hospitalization”. Recently, several policy measures have been taken to reduce social hospitalization, such as the reimbursement rate adjustment, the pilot project of the medical-care integrated judgment system, and the community-based integrated care initiative. However, despite of these policy measures, social hospitalization has not declined. This study proposed several policy suggestions to reduce social hospitalization such as the reform of the financial and delivery system, and strengthening performance evaluation focusing on social hospitalization rate indicators.
Article V: "The Paradigm and Direction of Policy for Young People," Kim, Moon-Kil, KIHASA
In this article, based on the evaluation of youth policies prepared after the enactment of the law, I tried to seek the direction of mid to long-term policy development by presenting the principles and directions necessary for setting a new youth policy paradigm. The background of the emergence of youth issues and the process of formation of youth policies were briefly reviewed, and current policies were evaluated in terms of responsiveness to the implementation phase of policies, uniqueness of youth policies, and responsiveness to policy areas based on a review of the current status of youth policies. In addition, support for the transition period based on a new transition path, reorganization of policy areas, adherence to the youth cognitive perspective of social policy, strengthening of the principle of bridging gaps and enhancement of policy effectiveness, long-term policy design and linkage, intensive support through policy targeting, population and society Principles and directions for responding flexibly to changes in the economic environment were presented.
