'My premium jumped 20-fold last month' — could your national health insurance bill spike too?

"My national health insurance premium was around 5 million won ($3,520) last month, but in July I was billed more than 130 million won."

Posts from self-employed workers complaining that their July health insurance premiums suddenly ballooned have been spreading across SNS. The outcry has grown amid reports that the government is discussing a reform to raise both the upper and lower premium caps, fueling talk of a "premium bomb."

The sudden increase for self-employed workers is not the result of a higher premium cap. In most cases, the actual income they earned the previous year exceeded the income used to calculate their earlier premiums, triggering additional charges during the annual settlement process.

Health insurance premiums are assessed based on the prior year's income and then adjusted the following year to reflect any changes. A sharp rise in income can therefore result in a large lump-sum increase at settlement time.

National health insurance subscribers fall into two broad categories: workplace-based subscribers and regional subscribers. While self-employed workers might assume they belong to the regional category, any business owner with even one employee is classified as a workplace-based subscriber.

This is because Article 6 of the National Health Insurance Act designates "workers and employers at all workplaces" as workplace-based subscribers.

For workplace-based subscribers, the premium is calculated primarily as a "monthly wage-based premium" — the monthly wage multiplied by the applicable premium rate.

For example, a monthly salary of 5 million won would generate a health insurance premium of 359,500 won, based on this year's rate of 7.19 percent.

Since the employee and employer each cover half, the worker's actual out-of-pocket premium comes to 179,750 won.

If a subscriber earns income beyond their regular wages, they must also pay a "non-wage income monthly premium" — the non-wage monthly income multiplied by the same premium rate.

Under Article 69 of the National Health Insurance Act, the non-wage income monthly premium applies when annual non-wage income exceeds 20 million won, with the same rate used for the wage-based premium.

In simple terms, a worker with an additional 50 million won in annual income outside their salary would owe an extra 179,750 won per month in non-wage income premiums.

Higher income does not, however, mean premiums rise without limit — the law sets both a ceiling and a floor.

The current cap on the wage-based monthly premium is 9.18 million won; the cap on the non-wage income monthly premium is 4.59 million won.

A subscriber begins paying the wage-based premium at its ceiling once their monthly salary reaches 127.73 million won — equivalent to an annual salary of roughly 1.53 billion won.

For self-employed business owners classified as workplace-based subscribers, the premium base is the business income generated by their operation — total revenue minus necessary expenses.

An annual income of around 1.54 billion won triggers the wage-based premium ceiling.

If the business also generates rental income from real estate leased alongside the main operation, that income is included in the business income calculation as well.

A common thread among those who posted about surging premiums on SNS is that they all received sudden notification of increases last month.

The National Health Insurance Service said the spike is a function of how and when premiums are calculated.

Because income is not finalized during the year, premiums are first assessed based on the prior year's reported wages. Once actual wages are confirmed the following year, the difference is factored in and the premium adjusted accordingly.

If actual wages were higher, the subscriber pays the shortfall; if wages fell, the overpayment is refunded.

The service collects annual reports from all workplaces on the total prior-year wages of their workplace-based subscribers. The filing deadline for self-employed business owners is the end of May, and the end of June for those subject to the faithful-reporting requirement.

Depending on when they file, self-employed workers may therefore see their premiums increase — or receive a refund — in either June or July.

As an example: if a subscriber's monthly salary was 1 million won in 2023, 2 million won in 2024 and 5 million won in 2025, premiums from July 2024 through June 2025 would be based on the 2023 salary of 1 million won, and premiums from July 2025 through June 2026 on the 2024 salary of 2 million won.

When the 2025 actual income is reported at 5 million won, the subscriber must pay a lump-sum catch-up: a premium on the 4 million won income gap for January through June 2025 — when the 2023 salary was the basis — and a premium on the 3 million won gap for July through December 2025, when the 2024 salary applied.

But can a health insurance premium really jump more than 20-fold in a single month?

The National Health Insurance Service said it is possible. "There may have been a reporting error, but since we cross-check data received from the National Tax Service, it is highly likely that the individual business owner's income increased significantly last year," a service official said.

Because the owner of a self-employed business is both the employer and a subscriber, they must — unlike regular employees — personally cover both halves of the wage-based premium that would ordinarily be split with a company.

The service added that if the bill also includes a portion of the settlement adjustments for employees' premiums that the business is responsible for, the total amount can appear even larger.

"The premium notice lists a breakdown by subscriber, including the business owner," a service official said. "Detailed information can be confirmed by calling the service or through an online inquiry."

One policy change that some SNS users cited as a possible cause of the premium surge is not in effect.

The Ministry of Health and Welfare last month reported a proposed reform to a subcommittee of the Health Insurance Policy Deliberative Committee that would raise the premium ceiling from the current 30 times the average premium two years prior to 40 times. Any revision to the premium assessment standard requires deliberation by the full committee and amendments to relevant laws — the proposal has neither been finalized nor implemented.

The National Health Insurance Service noted that subscribers whose settlement-adjusted premiums exceed their regular monthly bill — due to year-end reconciliation or similar reasons — may apply to pay the balance in installments of up to 12 months.