Merger of Medical InsuranceCase

(12-1 KCCR 913, 99Hun-Ma289, June 29, 2000)

In this case, the Constitutional Court upheld the relevant provi-sions of the National Health Insurance Act which unify medicalinsurance systems into one and regulate the process of transferring the deposit fund and unifying the finances.

A. Background of the Case

The National Health Insurance Act, enacted on February 8, 1999and to be effective on July 1, 2000, was about to merge those insuredseparately under workplace insurances and under regional insurancesunder the National Health Insurance Corporation as the commoninsurer.

The National Health Insurance Act has provisions that govern themerger of the finances of workplace insurances and regional insur-ances, the involuntary dissolution of former workplace insuranceunions, and the comprehensive assignment of the rights of the dis- solving unions to the National Health Insurance Corporation.

Complainants are the members of the regional medical insuranceunions, who alleged that, the dissolution of workplace insuranceunions and the resulting assignment of the deposit funds to the newlycreated National Health Insurance Corporation violates their rights toproperty; the merger of the workplace insured and the regional in-sured pursuant to the National Health Insurance Act creates inequal-ity between the workplace insured whose income can be easily moni-tored and the regional insured whose income is difficult to be de-tected, and thereby violates the right to equality of the workplaceinsured. They filed this constitutional complaint against the provi-sions of the National Health Insurance Act on May 20, 1999.

B. Summary of the Decision

The Constitutional Court decided on a unanimous decision that the provisions of the National Health Insurance Act do not violatethe Constitution.

The Constitutional Court first ruled on whether the National

Health Insurance Corporation's succession to the deposit fund of the workplace medical insurance unions violates the right to property or equality as follows:

Only when complainants have recognized legal rights to concretecompensations, their status under social insurance laws enjoy theprotection of the right to property. In this case, the relevant statute did not specify the union members' right to receive the deposit fundupon the dissolution or merger of the union. A right under socialinsurance law is a public right that cannot receive the protection ofthe right to property unless the legal status under that right hasalso the characteristic of a private interest belonged to the holdersof that right. The deposit fund lacks even the minimum charac-teristic of a property right under private law. Therefore, the depositfund of the medical insurance unions is not included in the scope of protection of the right to property in Article 23 of the Constitution.

On the other hand, the right to medical insurance benefits is apublic right protected by the right to property under the medicalinsurance law. However, the merger of the deposit funds neitherthreatens the right to medical insurance benefits nor effects adversechanges against the workplace insured in the concrete contents ofthe benefits specified under the medical insurance law. The merger of the deposit funds does not restrict the property right to medical insurance benefits.

Also, the purpose of the deposit fund is to secure the payingpower of the insurer and thereby make possible the medical insuranceprogram as part of social insurance. Even if the merging insurerand the merged insured make unequal contributions in forming thenew deposit fund under the medical insurance merger, such differ-ence does not affect the equality in insurance premiums after themerger. The merger of the deposit fund does not violate the com-plainants' right to equality.

The Constitutional Court then ruled on whether the merger of themedical insurances can guarantee the equality in insurance premiumsbetween the workplace insured and the regional insured as follows:

The principle of equality in taxation and other public assessmentsrequires that those burdened with public assessments bear a legally and factually equal burden pursuant to statute. In other words, theprinciple of equal burdens in public assessments consists of two com-ponents: equality under the law in the duty to pay public assess-ments and equality in enforcing the duty to pay through collectionof the public assessments.

When the insured whose income can be discovered and the in-sured whose income is difficult to detect are covered by one insurer,

and the finances of the two groups are merged, the difference amongthe insured inincome detectabilityleads to 'the difference in en-forcement of the duty to pay insurance premiums,' a substantivedifference that cannot be ignored constitutionally from the perspectiveof the principle of equal burdens in public assessments.

When the incomes of the self-employed are not properly beingreported, the biggest obstacle to the merger of two essentially heter-ogeneous groups under the merger of the medical insurances is aproblem of not only how to merge the finances of the two systemsbut also how to distribute fairly insurance premiums between theworkplace insured and the regional insured after the merger.

However, the National Health Insurance Act allows about oneand a half year of a deferral period until the time of the merger fordetermining the incomes of the regional insured or the objectivecriteria of inference in doing so. Even after January 1, 2002, thedate of the merger of the finances and until the incomes of theregional insured can be determined or inferred through a reasonableand reliable plan, a democratic operation of the Finance ManagementCommittee can take into proper accounts the interest of both theworkplace insured and the regional insured and adjust the premium rates of the workplace insured and the regional insured so that thepremium rates are not set disadvantageously to the former. There-fore, although the workplace insured and the regional insured areessentially heterogeneous groups in terms of the types and the de-tectability of income, the said merger of the finances of the work-place insured and the regional insured does not violate the Constitu- tion.