In foreign countries where health insurance is executed the financial deficit of insurance carriers by the increase of medical demand and cost is a serious problem. Therefore, the financial security of insurance carriers is a key to success of fixing health insurance in Korea.
The objectives of this study are to construct a forecasting model for the financial status of insurance carriers and to forecast financial impacts of health insurance expansion plan proposed by the government on insurance carriers. Before a forecasting model is formulated, the determinants of medical use and the causes of medical cost inflation are analysed on the bases of theories and empirical studies. The equations in the model are estimated by econometric methods using time series and cross-section data.
By the forecasting results insurance carriers is expected to show a loss from 1985 and it increases every year. In this study we suggest the change of coverage structure to solve the deficit and analyze its impact on the financial status of insurance carriers.
