The launch of the 5th generation health insurance is complicating decisions for current policyholders. While premiums have significantly decreased, changes in coverage structures mean that the extent of coverage can vary based on the treatments received.
According to the Financial Services Commission on May 9, the key feature of the 5th generation health insurance is the enhancement of coverage for severe illnesses, while reducing coverage for non-severe, non-covered treatments. Premiums are expected to be about 30% lower than the 4th generation and over 50% lower than the 1st and 2nd generations.
However, when choosing health insurance, it is essential to consider not only the premium levels but also past insurance payouts and future healthcare usage plans.
For existing policyholders, if the expected insurance payouts exceed the annual premium, it is advantageous to maintain the current plan. Conversely, if anticipated payouts are lower than the premium, opting for reduced coverage to lower costs may be a sensible choice.
For instance, a policyholder paying approximately 170,000 won per month for a 1st generation health insurance plan could see their monthly premium drop to around 20,000 won with a transition discount. Even after the three-year discount period, the premium would be about 40,000 won. By enrolling in a 'selective discount clause' that excludes low-usage items like physical therapy or non-covered injections, premiums could be reduced by 40% to around 100,000 won.
However, switching to the 5th generation is most beneficial for those who rarely visit hospitals and find the high premiums of the 1st generation burdensome. If a policyholder with a 1st or 2nd generation plan anticipates treatment for a severe illness, it is advisable to maintain the existing coverage for broader protection, and consider switching to a selective discount clause after treatment when healthcare usage is expected to decrease.
For those frequently visiting hospitals for treatments like physical therapy or extracorporeal shockwave therapy, it may be more advantageous to retain the existing health insurance. Particularly, the 1st generation plans often have lower out-of-pocket costs and favorable coverage conditions, so it is crucial to evaluate overall healthcare usage patterns and the extent of non-covered treatments before deciding to switch.
Park Chang-sik, a senior official at Dongyang Life Insurance, stated, "For policyholders who do not have immediate plans for hospital visits and are not overly burdened by premiums, it is advisable to monitor future situations before hastily switching to the 5th generation. Conversely, those facing increased premium burdens due to aging should compare the cost-saving benefits and coverage structures before making a decision."
* This article has been translated by AI.
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