The health insurance in Korean is a national program designed to bring quality health care to the public. Under the health insurance program, people are quired to pay a portion of covered charges. The imposition of this kind of patient cost-sharing requirement is partly needed to prevent any moral hazard that could occur if consumers were able to obtain full insurance and consequently had no motivation to efficiently use resources offered by the health insurance program.
A coinsurance is implemented in Korea. But actual medical expenses charged to an insured are much higher than a stated percentage because of a broader range of ineligible medical expenses imposed by the health insurance system in Korea. The personal share system required an insured to pay in proportion of medical expenses incurred by him or her, placing an enormous burden on those who incur large medical expenses.
In a move to beef up the medical plan, the government imposed a ceiling for medical expenses to be paid by patients effective July 1, 2004 by applying out of pocket payment of limit system. Under the new provision, an insured pays a percentage of covered charges but up to a maximum of 3 million won for six months. The plan pays all of the remaining expenses incurred during the same period. The individual out of pocket payment limit system is intended to enhance health insurance coverage and more importantly lessen the burden on those who incur large medical expenses due to their serious illness.
There has been few studies aimed to determine impacts of the individual out of pocket payment limit on patients given a short time after the introduction of the threshold, although earlier studies suggested the possibility of limiting covered medical expenses charged to high-paying patients. This study aimed to estimate the impact of the individual out of pocket payment limit expense of 3 million won on high-paying patients and to provide valuable input on establishing effective policies rel
