🚨 Foreign Health Insurance Surplus 3.2 Trillion Won: 'Free Riding' Claims Proven Wrong

Today Korean Economic News | 2025.06.03

📌 Foreigners a burden on health insurance? Actually contributed 3.2 trillion won surplus over 7 years

💬 Claims that foreign health insurance subscribers burden national finances have been proven false. According to National Health Insurance Service data, foreign subscribers recorded a cumulative surplus of 3.2 trillion won over the past 7 years (2018-2024). Workplace subscribers alone generated a massive surplus of 3.97 trillion won, easily offsetting the regional subscribers' deficit of 770 billion won. The health insurance union called this "fact distortion that promotes xenophobia" and emphasized the need for inclusive policy approaches. This data shows that foreign workers are making real contributions to Korean society, which faces challenges from aging population and low birth rates.

1️⃣ Easy Understanding

Have you heard people say "foreigners use our country's health insurance for free"? But when we look at the real data, the opposite turned out to be true. Foreigners are actually helping our country's health insurance finances a lot.

Let me first explain simply how health insurance works. The health insurance fees we pay every month go into a big savings pot. When someone goes to the hospital, money is taken from that pot to help pay for their treatment. If more money comes in (insurance fees) than goes out (medical costs), that's called a 'surplus'. If it's the opposite, that's called a 'deficit'.

Some people have been claiming that "foreigners pay little in insurance fees but spend a lot on hospital bills." But when we looked at the actual numbers, it was a completely different story. From 2018 to 2024, over 7 years, foreigners paid 3.2 trillion won more in insurance fees than they spent on medical costs.

Foreign workers with jobs made the biggest contribution. They recorded a surplus of 3.97 trillion won over 7 years. Individual subscribers had a deficit of 770 billion won, but the workplace subscribers' surplus was more than enough to cover this and still leave a lot extra.

Why did this happen? Foreign workers mostly come to Korea young and healthy to work. Young people don't go to hospitals much, so their medical costs are low, but they pay their insurance fees every month without fail. Meanwhile, Korean citizens are spending more on hospital bills as the population ages.

This data is important because it relates to our society's future. With low birth rates and an aging population, we have fewer working people and rising medical costs. Young foreign workers are actually helping to support our health insurance system.

In the end, the claim that "foreigners are free riders" was not true. Instead, the numbers prove that they are making real contributions to our health insurance finances.

2️⃣ Economic Terms

📕 Health Insurance Balance

Health insurance balance means insurance fee income minus medical cost expenses.

• If income is more than expenses, it's a surplus. If expenses are more than income, it's a deficit.
• A 3.2 trillion won surplus for foreign health insurance means foreigners paid that much more in fees than they spent on medical costs.
• This means foreigners are making a net contribution to health insurance finances.

📕 Workplace Subscribers vs Regional Subscribers

Workplace subscribers are people who work at companies and join health insurance through their workplace.

• Insurance fees are split 50-50 between the company and the person, and they have relatively stable income.
• Regional subscribers are self-employed or unemployed people who join individually without a workplace.
• Generally, workplace subscribers contribute more to health insurance finances than regional subscribers.

📕 Population Dependency Ratio

Population dependency ratio shows how many young and elderly people that 100 working-age people (15-64 years old) must support.

• Korea's elderly dependency ratio is expected to jump from 22.9 people in 2020 to 77.6 people in 2050.
• Rising dependency ratios are a major cause of health insurance financial pressure.
• Young foreign workers help reduce this support burden.

📕 Inclusive Welfare Policy

Inclusive welfare policy means welfare systems that include all members of society.

• It provides benefits based on social contributions regardless of nationality or origin.
• It can contribute to social integration and economic development in the long term.
• There are arguments that foreign health insurance issues should be approached from this perspective.

3️⃣ Principles and Economic Outlook

✅ Structural Reasons for Foreign Health Insurance Surplus

• Let's analyze the fundamental reasons why foreigners create a surplus in health insurance.

  • First, the age structure of foreign workers favors health insurance. Most foreign workers coming to Korea are young people in their 20s-40s. According to Statistics Korea data, over 70% of foreigners living in Korea are under 30, which is very different from the overall population age distribution. Young age groups have low rates of chronic diseases or serious illnesses, so their medical costs are low. However, health insurance fees are paid in proportion to income, so foreign workers with steady income pay a lot in fees compared to their medical costs. Actually, medical costs for people in their 20s-30s are only 1/10 the level of those 60 and older. This age structure difference is the main reason for the foreign health insurance surplus.

  • Second, foreigners' medical usage patterns are different from Korean citizens. Foreigners use hospitals relatively less due to language barriers, lack of understanding about the medical system, and cultural differences. They especially tend to visit hospitals only in emergencies rather than for preventive care or regular checkups. Also, when they plan to return to their home countries, they often get only simple treatments in Korea rather than long-term care. These different medical usage patterns work to lower foreigners' medical cost spending. However, this also includes the problem that foreigners might not be getting enough necessary medical services.

  • Third, the employment type characteristics mean a high rate of workplace subscribers. Most foreign workers get proper work visas and belong to companies. So they are classified as workplace subscribers and share insurance fees 50-50 with their companies. Workplace subscribers pay relatively higher insurance fees compared to regional subscribers but have lower medical usage rates. Especially foreign workers in manufacturing, construction, and agriculture enter the country in physically healthy condition, so their medical costs are very low for the first few years. This is the main reason why foreign workplace subscribers recorded such a large surplus of 3.97 trillion won.

• The foreign health insurance surplus is not a random phenomenon but due to structural factors. This is an important example showing the positive impact that young foreign workers have on social security systems in an aging society.

✅ Economic Contributions of Foreign Workers in an Aging Society

• Let's look at the role and economic ripple effects of foreign workers in Korean society, which faces low birth rates and aging.

  • First, they play an important role in compensating for the decrease in working-age population. Korea's working-age population (15-64 years old) peaked at 37.57 million in 2017 and started declining. It has decreased to about 36 million in 2024 and is expected to fall to 22 million by 2070. Meanwhile, foreign workers numbered about 950,000 in 2024, making up 3.5% of all employed people. They work in manufacturing, construction, agriculture, and service industries, taking jobs that Korean citizens avoid while continuing economic activities. Without foreign workers, many industries would face production problems due to labor shortages. Local manufacturing companies especially depend on foreign workers at rates of 20-30%.

  • Second, they contribute to the sustainability of social security systems. Foreigners make significant contributions not only to health insurance but also to the national pension. As of 2023, about 400,000 foreigners were national pension subscribers, paying about 1.2 trillion won in pension fees. However, most foreign workers return to their home countries when their contracts end, receiving their pensions as lump sums or giving them up. This makes a real contribution to national pension finances. As pension payment burdens increase due to aging, foreigners' contributions help system stability. Health insurance works the same way, with insurance fees from young, healthy foreigners supporting medical costs for the elderly.

  • Third, they also contribute to economic growth and tax revenue increases. Foreign workers pay various taxes including income tax and resident tax based on their income. They also pay value-added tax through consumption activities. According to Ministry of Economy and Finance estimates, taxes paid by foreigners amount to about 3 trillion won annually. This makes a significant contribution to national fiscal revenue. Foreigners' consumption activities also help boost domestic demand. In rural areas especially, foreign workers' consumption plays an important role in regional economic vitalization. In some farming areas, it would be difficult to operate stores or restaurants without foreign workers.

• Foreign workers do more than just fill labor shortages - they are important resources that increase the sustainability of an aging society. It's necessary to accurately evaluate their economic contributions and implement inclusive policies.

✅ Need for Inclusive Social Policies and Future Directions

• Let's explore the policy implications of foreign health insurance data and future directions.

  • First, fact-based policy making is important. Discussions about foreign health insurance have often been emotional and biased. The claim that "foreigners are free riders" is a typical example. But this data shows the situation is actually the opposite. Policies should be based on objective data, not emotions or prejudices. Going forward, when making policies related to foreigners, we should base them on accurate statistics and analysis. Media and politicians should also make reports and statements based on facts rather than sensational expressions. Wrong information promotes social conflict and makes rational policy making difficult.

  • Second, we need to improve foreigners' access to medical care. While it's positive that foreigners are creating a surplus, from another perspective, this might also mean they're not getting enough necessary medical services. They often avoid using hospitals due to language barriers, cultural differences, and lack of medical information. The government should expand multilingual medical services, create treatment environments that consider cultural differences, and provide medical information so foreigners can receive appropriate medical services. This is important not only from a humanitarian perspective but also for public health management. If foreigners don't get proper treatment, there are risks like infectious disease spread.

  • Third, we need an integrated approach linking immigration policy in the long term. Korea's current foreign worker policy is based on short-term rotation principles. However, with continuing low birth rates and aging, we should also consider policies that encourage excellent foreign workers to settle long-term. Countries like Canada and Australia use point-based immigration systems to attract young, excellent foreign workers, achieving both population structure improvement and economic development. Korea should also expand opportunities for skilled foreign workers to get long-term stays or permanent residence, and create environments where they can settle stably in Korean society. This would help ensure social security system sustainability and boost economic vitality.

• Foreign health insurance surplus data suggests our society should have a more open and inclusive attitude toward foreigners. We should create a society that develops together through mutually beneficial policies rather than emotional conflicts.

4️⃣ In Conclusion

The fact that foreign health insurance subscribers recorded a surplus of 3.2 trillion won over 7 years is important data that corrects our society's prejudices and misunderstandings. Foreigners who were criticized as "free riders" were actually making net contributions to our health insurance system.

This data provides several important insights. First, policies should be based on objective facts, not emotions or prejudices. Second, young foreign workers' contributions in an aging society are bigger than we thought. Third, inclusive approaches benefit all members in the long term.

Especially as the working-age population rapidly decreases due to low birth rates and aging, the role of foreign workers is becoming more important. They do more than just fill labor shortages - they contribute to the sustainability of social security systems. They provide real help to Korean society in many ways including health insurance, national pension, and tax revenue increases.

Going forward, we need policies that allow foreigners to work and live in better environments. We should help them settle stably as members of Korean society through improved medical access, language support, and understanding of cultural differences. This is a rational choice not just from a humanitarian perspective but also economically.

Most importantly, this data shows our society should move toward recognizing and embracing diversity. The numbers prove that living together with people from different cultures and backgrounds is not only morally right but actually benefits all members.

Ultimately, it's time to move away from the "free riding" frame and look at foreign policy from a new perspective of "mutual growth and contribution." We must create an inclusive society where all members develop together through rational policies based on facts.