Moon Administration Policies Led to Massive Financial Losses for Publicly Owned Health and Energy Institutions
This is pretty dramatic how these once financially healthy public institutions are now losing huge amounts of money:
“Moon Jae-in Care,” as the president’s health policy has become known, is driving a major decline in the profits of state-owned institutions, as is his energy strategy.
Joong Ang Ilbo
According to a Ministry of Economy and Finance report released late Tuesday, the net profits of 339 public entities plummeted 84.7 percent from 7.2 trillion won ($6.1 billion) in 2017 to 1.1 trillion won in 2018.
The net profits of these institutions have been on a steady decline, falling from 15.4 trillion won in 2016.
The National Health Insurance Service was hit hardest. After reporting 368.5 billion won in net profit in 2017, it posted a 3.9 trillion won net loss last year.
The dramatic change is largely blamed on the president’s health policies, which went into effect in July 2018. Moon Jae-in Care increases the range of medical treatments covered by national health insurance.
The goal is to raise national insurance coverage from 63.2 percent of treatments in 2016 to 70 percent by the end of 2022.
President Moon in August 2017 promised to improve national health insurance coverage, as Korea’s coverage rate falls far short of the Organisation for Economic Cooperation and Development (OECD) average of 80 percent.
Public energy company net profits shrunk as a result of the changes in energy policy.
Korea Electric Power Corporation’s (Kepco) net profit fell from 7.1 trillion won in 2016 to 1.4 trillion won in 2017. Last year, it reported a 1.2 trillion won net loss.
The five affiliates of Kepco all reported net profit declines.
Korea Hydro & Nuclear Power reported its first net loss in five years. In 2016, before the Moon administration began, the company reported 2.45 trillion won in net profit. Its net profit decreased to 861.8 billion won in 2017, and the company reported a net loss of 102 billion won last year.
The loss is considered to have been the result of the government reducing the use of nuclear power while increasing power generated from renewables, including solar and wind. Alternative energy is more expensive than nuclear power.
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