Evaluation of Long-term Care Insurance Policies and Programs

Published on November 20, 2025
Published by Social Administrative Program, Evaluation Division, Budget Analysis Department

    In recent years, Korea has continued to transition into an aging society thanks to improving income levels and developments in medical science. To deal with this trend, the Korean government introduced the long-term care insurance program in 2008 to help elderly citizens maintain financial stability in old age and reduce the financial burden on their families. Since then, the scope of benefits provided through the program has expanded, accompanied by an increase in government budget allocations. At the same time, a wide range of challenges have emerged, with rapid population aging causing an increase in the number of beneficiaries and ultimately a deterioration of the program's financial health. Other challenges remain regarding the use of long-term care insurance services, the operation of long-term care facilities, and the working conditions of care providers at such facilities.Against this backdrop, this report provides an in-depth analysis and evaluation of the current status of Korea's long-term care insurance policies and programs, identifying their outcomes and key challenges as well as recommendations for improvement.First, it is imperative to explore measures to enhance the financial sustainability of the long-term care insurance program, given the program's declining net profit and its inability to maintain reserves above the legal standard. It should be noted that major financial institutions also project the program's deficit and depletion of reserves within several years.Second, to address continuing incidence of fraudulent claims for long-term insurance benefits, the government needs to extend on-site investigations of long-term care facilities and improve the fair detection system to strengthen the efficiency of the monitoring system. Integrating the renewal of designating long-term care institutions into the monitoring framework may also be necessary.Third, although nursing expenses of long-term care hospitals, long-term care benefits categorized as the core allowances for special cases, have not been implemented in practice, the Ministry of Health and Welfare initiated a separate (pilot) program to subsidize such expenses, leading to inefficiencies in policy implementation. In this regard, the government needs to consider restructuring the current nursing-care payment programs to prevent redundancy and overlap.Fourth, the government should seek to strengthen oversight of long-term care facilities that fail to comply with the required personnel expense ratio and to revise relevant regulations, as currently there are no explicit regulations on violations of such requirements.Fifth, the government is advised to consider measures to improve the working conditions of care providers, including establishing an appropriate wage scheme, to attract high-quality workers to long-term care facilities.