How Does Korea's Health Insurance Co-payment Ceiling (Out-of-Pocket Maximum) Work?

Korea's co-payment ceiling is described as an annual limit under the National Health Insurance system: once a subscriber's covered co-payments for the year pass an income-based threshold, the National Health Insurance Service (NHIS) is described as bearing and refunding the excess. The same mechanism is often searched in English as an "out-of-pocket maximum." What follows outlines where the ceiling comes from in law, how the amount is set, how the refund is paid, which costs fall outside it, and how it applies to foreign residents.

What is the legal basis of the co-payment ceiling?

The co-payment ceiling is described as resting on Article 44 of the National Health Insurance Act. According to the government-provided English translation of the National Health Insurance Act by the Korea Legislation Research Institute, a person receiving insured benefits bears part of the cost — the co-payment — as prescribed by Presidential Decree, and where the annual total a subscriber bears exceeds a ceiling set by Presidential Decree, the excess is described as being borne by the NHIS and paid to the subscriber. The same article is described as directing that the ceiling be set according to the subscriber's income level, and as delegating the methods of calculation and payment to Presidential Decree.

In practice, then, the co-payment ceiling is described as pairing two ideas: the co-payment that a subscriber pays out of pocket for insured care, and a ceiling above which the NHIS returns the excess. The NHIS's own English guidance on Insurance Benefits describes the same structure, stating that an annual co-payment ceiling is determined according to the income level of the insured and that the co-payment amount above the ceiling during one fiscal year is reimbursed by the NHIS. The statutory framework and the NHIS's own description are therefore presented as carrying the same content.

How is the co-payment ceiling amount determined?

The co-payment ceiling is described as not being a single fixed figure but as varying with the subscriber's insurance-premium burden. Under the Enforcement Decree of the National Health Insurance Act, the ceiling is described as being calculated by the method set out in the Decree's Annex 3, which uses a regional subscriber's household premium or an employee subscriber's individual premium as the "base premium for the ceiling" and sets a different amount for each premium band. The grouping commonly called the income-decile ceiling is described as being divided in this way, by premium burden rather than by a raw income figure alone.

The same Annex is described as also setting how the ceiling is adjusted each year. The method is described as calculating a given year's ceiling by applying the national consumer price index (CPI) change rate to the previous year's ceiling, and where that rate exceeds 5 percent, applying 5 percent, with amounts under 10,000 won discarded. Because the ceiling is described as being linked to price movements and re-set annually, the reference year matters when a particular year's figure is examined. The specific standards and band amounts for the base premium are described as being delegated to notice by the Minister of Health and Welfare, so each year's ceiling is described as being finalized by that notice on top of the Decree's calculation framework.

How do income brackets and long-term care hospital stays change the ceiling?

The co-payment ceiling is described as being divided not only by income bracket but by a second axis: the number of days admitted to a long-term care hospital. The Enforcement Decree's Annex 3 is described as applying a different ceiling for admissions exceeding 120 days at a long-term care hospital versus other cases, a design described as reflecting the cost patterns seen in long stays. According to the Ministry of Health and Welfare's 2025 data on the health-insurance co-payment ceiling, the income brackets are divided into seven bands by average annual premium level, with a lower band carrying a lower ceiling and a higher band a higher ceiling.

By comparison, the same materials describe the 2024 "other cases" ceiling as ranging from KRW 870,000 in decile 1 to KRW 8,080,000 in decile 10, which shows the pattern of the ceiling being adjusted slightly each year in line with the price-change rate. These bands and amounts are described as showing the classification the system sets rather than a figure that applies directly to any one person, and which band a subscriber falls into is described as depending on that subscriber's premium burden.

How do prepayment and post-payment refund differ?

The way an amount above the ceiling is handled is described as being split into a prepayment (pre-benefit) route and a post-payment refund route. According to the NHIS's guidance, the prepayment route applies where the co-payments paid within one year at the same medical institution exceed the highest ceiling: the patient is described as paying only up to the ceiling, and the hospital or clinic is described as claiming the excess from the NHIS. The post-payment refund route, by contrast, is described as adding up the co-payments a subscriber paid across several hospitals, clinics, and pharmacies over the year and, in the following year, returning the part above the premium-based ceiling to the subscriber.

The post-payment refund is described as taking place after a year has passed because an individual's ceiling is confirmed only afterward, once the subscriber's premium level is known. The NHIS's materials are described as explaining that this refund is announced to eligible subscribers around August of the following year and paid after an application, so a co-payment-ceiling refund is described as being settled not in the year care was received but in the year after. The two routes are described as sharing the aim of easing a burden above the ceiling, but as differing in that the prepayment applies at the time of care on a per-hospital basis while the post-payment refund goes through an annual total and settlement.

Which costs are excluded from the ceiling calculation?

Because the co-payment ceiling is a mechanism aimed at the health-insurance co-payment, costs that health insurance does not cover are described as being excluded from the calculation. According to the NHIS's materials, non-covered treatment costs, selectively covered benefits, full self-pay items, dental implants, room charges for upper-grade wards such as two- or three-bed rooms, and the co-payment portion of Chuna manual therapy are described as being left out of the ceiling total. These items are described as either falling outside the health-insurance benefit or having a different co-payment structure, so they sit outside the range of the co-payment that the ceiling targets.

This exclusion structure is described as showing that the ceiling operates on the co-payment a patient pays within the health-insurance benefit, not on the full amount of medical spending. A large amount paid at a hospital does not, therefore, all count toward the ceiling calculation, and which costs enter the calculation is described as depending on the division between covered and non-covered care. A separate National Health Insurance mechanism, the copayment special case for severe, rare, and intractable illness, instead lowers the co-payment rate itself for a registered condition and runs alongside the ceiling rather than within the same calculation. Because the target and the excluded items are set together in this way, how much counts and whether a refund is made in a particular case is described as an area that calls for individual confirmation.

Does the co-payment ceiling apply to foreign residents?

The co-payment ceiling operates within National Health Insurance coverage, so it is described as applying to enrolled subscribers — a category that includes foreign residents who are enrolled — rather than to short-term visitors who pay out of pocket without enrollment. According to the NHIS's English guidance for foreigners, enrollment is mandatory: an employed foreigner is subject to subscription on employment, and a self-employed foreigner or overseas Korean who has stayed in Korea for over six months has been subject to mandatory subscription as a local (regional) subscriber since July 16, 2019.

The same guidance states that National Health Insurance for foreigners has the same coverage as it does for Korean citizens. On that basis, the co-payment ceiling — as part of the insured benefits — is described as applying to enrolled foreign subscribers on the same terms as it applies to nationals, including the annual limit set by premium band and the post-payment refund settled the following year. The distinction that tends to matter for medical tourism is enrollment: a short-term visitor who receives care without being an NHIS subscriber is described as being outside the co-payment ceiling, and elective or cosmetic procedures, which are largely non-covered, would in any case fall among the excluded items above. Whether the ceiling applies in a specific case, and how much is refunded, is described as depending on the subscriber's own circumstances and calls for individual confirmation.

Key points

The co-payment ceiling is described as a mechanism under Article 44 of the National Health Insurance Act and its Enforcement Decree by which, once a year's co-payments exceed an individual ceiling, the NHIS bears the excess. The ceiling is described as divided by the subscriber's premium-based income bracket and by whether admission to a long-term care hospital exceeds 120 days, and as adjusted each year by applying the national CPI change rate to the previous year's figure. The excess is described as handled through a prepayment claimed by the hospital and a post-payment refund the NHIS settles in the following year, while non-covered care, selectively covered benefits, and full self-pay items are described as excluded from the calculation. NHIS guidance describes coverage for enrolled foreign residents as the same as for Korean nationals, so the ceiling is described as applying to enrolled foreign subscribers on the same terms. Each year's amount and whether a refund is due in an individual case is described as an area that turns on the reference year's notice and the subscriber's circumstances.