The cost burden of South Korea's National Health Insurance Service (NHIS) is projected to climb steeply in the coming decades, potentially reaching one-quarter of individuals' incomes due to the country's rapidly ageing population and increasing life expectancy, a recent study has found.
Conducted by Seoul National University’s Tech-Biz Innovation Platform, the study analysed the fiscal impact of demographic shifts on the state-run health system. South Korea officially entered “super-aged” status in 2024, with over 20% of its population aged 65 and above.
According to the study’s most likely scenario, the contribution rate for full-time employees- currently set at 7.09% and shared between employer and employee- would increase to 10.04% by 2035, 15.81% by 2050, and 25.09% by 2072.
Although the Ministry of Health and Welfare has kept the rate frozen for the third consecutive year in 2025, it had risen steadily from 5.33% in 2010. The NHIS contribution rate is set annually as a percentage of income.
The researchers described their projections as conservative, noting they do not account for additional cost pressures such as rising healthcare expenses or wage stagnation in an economic downturn.
The study was commissioned by the Presidential Committee on Ageing Society and Population Policy, which operates under the president’s office and is administered mainly by the Health Ministry.
With the growing number of elderly citizens, the country’s healthcare spending as a share of GDP has seen a consistent upward trend- from just 2.6% in the 1970s to 7.9% in 2020, and 9.2% in 2023.
Participation in NHIS is mandatory for all Korean nationals and many foreign residents.
Although the current legal limit for insurance contributions is 8% of income, discussions are underway about raising this cap to accommodate increasing fiscal pressure.