South Korea is preparing to collect nearly $2.4 billion in additional health insurance premiums from millions of households while returning another $1.3 billion to people who paid too much. The seemingly contradictory approach is part of an effort to make the country’s universal health insurance system more closely reflect what people actually earn.
Unlike the U.S., where Americans obtain coverage through a mix of employer sponsored insurance, private plans and government programs, South Korea operates a national health insurance system covering nearly all residents. Premiums are determined partly by income, but changes in earnings do not always translate into immediate adjustments. That can leave some people paying too little while others continue paying based on income they no longer receive.
The South Korean government wants to close that gap by automatically reviewing subscribers’ actual earnings each year. Rather than raising premiums across the board, the proposed reform would require people whose incomes have increased to pay the difference while reimbursing those whose earnings have declined.
The National Health Insurance Service, the public agency responsible for administering the country’s health insurance program, outlined the proposal in a report submitted to a parliamentary committee on October 20.
Under the plan, the agency would use finalized income records from South Korea’s National Tax Service to recalculate premiums annually. The changes would apply to approximately 9.08 million households insured outside employer plans, including self employed individuals, as well as 1.1 million salaried workers who earn additional income beyond their regular wages.
The financial consequences would be significant.
An analysis by the insurance agency found that approximately 3.94 million households would owe additional premiums totaling nearly $2.4 billion because their incomes had risen.
Another 2.32 million households would qualify for refunds totaling approximately $1.3 billion after experiencing declines in income.
The adjustments would leave the national health insurance system with an estimated $1.1 billion in additional revenue.
The difference stems from how South Korea currently calculates insurance premiums.
Salaried workers already undergo an annual reconciliation process. Their premiums are initially based on reported wages, and the government reviews the amounts each April using finalized income figures. Workers who paid too little must make additional contributions, while those who overpaid receive refunds.
However, households insured outside employer plans do not have the same routine automatic adjustment process. Workers with income beyond their salaries face similar limitations.
Instead, subscribers may need to request changes themselves when their earnings rise or fall. Those who do not apply can continue paying premiums that no longer reflect their financial circumstances.
This has created an imbalance. People whose incomes increase may not be charged additional premiums promptly, while those whose earnings decline can miss out on refunds unless they take action.
The scale of the problem becomes clearer when comparing current refunds with the government’s projections.
In 2025, only 210,000 households insured outside employer plans received refunds after submitting individual applications. Under the proposed automatic system, an estimated 2.32 million households could qualify for reimbursements.
South Korea already collects substantial additional revenue through the existing reconciliation system for salaried employees.
In April 2026, the government collected approximately $3.3 billion in additional premiums from employees whose previous payments fell short of their actual obligations. At the same time, it refunded roughly $600 million to workers who had overpaid.
The process generated a net $2.7 billion increase in national health insurance revenue.
Health authorities now want to apply a similar approach more broadly, ensuring that contributions reflect actual earnings regardless of whether subscribers receive regular salaries or earn income independently.
The additional revenue would also help finance medical care.
The government plans to direct the projected $1.1 billion toward strengthening healthcare services in underserved regions, supporting essential medical treatment and improving coverage for patients with rare diseases and serious illnesses.
The proposed changes would not mean that every South Korean household faces higher insurance costs. Instead, the government would systematically identify who owes more and who deserves a refund, using verified income data rather than relying on individual applications.
The result would be a national health insurance system that collects more revenue overall while returning money to millions of households whose financial circumstances have changed.
