The insurers, as the agents in charge of managing the program, consisted of 2 types of medical insurance societies. The class 1 medical insurance society was made up of the employers and class 1 employees. The class 2 medical insurance society consisted of any resident within regional jurisdiction of the medical insurance society who wanted to join. To provide health insurance for the uninsured, the minister of health and social affairs could order a medical insurance society to join the Central Federation of Medical Insurance Societies (CFMIS). The major role of CFMIS was to ensure stable insurance financing and to manage medical and welfare institutions. Both medical insurance societies and the CFMIS were regulated by the rules established in civil law.
Why did the Park government choose the medical insurance society as the administrative organ responsible for implementing NHI? What are the policy implications for the country of this choice? The issue of whether or not to have a decentralized medical insurance society-based administrative system has been a hotly debated policy issue in Korea. Several factors favored the choice of decentralized administration, implicit in the organization of medical insurance societies.
First, this was essentially the structure of the Japanese health insurance system. Second, the Park government considered the decentralized health insurance system as an intermediate step between a completely private voluntary health insurance system (e.g., health maintenance organizations) that would emphasize cost containment and a state-administered health insurance system (e.g., single-payer NHI) that might place substantial financial burdens on the state. Third, the bureaucratic machinery to administer an NHI system just did not exist within the Korean government in 1977, when President Park decided to mandate health insurance for large employers. Therefore, medical insurance societies appeared to be the best vehicle for gradually extending health insurance to the whole nation.