Social Welfare and Social Security System in South Korea

Many countries in Asia is undergoing significat demographic, social and economic transformations which challenge the capability of social security schemes to adapt to new emerging needs and the problem of rising social security costs. The Republic of Korea established the first medical insurance Act in 1963. At that time, The Korean government decided to implement a voluntary insurance scheme in view of the difficulties encountered by individuals and enterprises to pay insurance contributions due to the low level of per capita income and the poor financial situation of the enterprises. However, with the successful implementation of three consecutive Five-year Economic Development Plan initiated form 1962, the Republic of Korea achieved notable economic progress as well as improvements in social welfare protection. In tire fourth Five-year Economic Development Plan, the government re-examined the medical insurance issue in 0rder to provide the population with comprehensive protection against diseases. In 1996, 97.9 percent of the population covered by the medical insurance program the rest were covered by the medical aid program. The financial resources of the medical insurance system come from contributions paid by the insured person and his/her employer and government subsidies. For health care in rural areas, government-operated public health centers, health sub-centers and primary health care post have been established throughout the country. Health expenditure as a percentage of GNP in the Republic of Korea increased from 2.7 per cent in 1970 to 5.4 percent in 1994 the growth rate is approximately 2.9 percent a year. The future option is to further pursue more effective cost containment policies regulating tile supply and demand sides as well as the rates of medical care fees which affect the entire medical market. The experiences of social security and medical insurance system of the Republic of Korea can be used in the countries such as Iran.