As disputes over non-covered medical treatments under real-life insurance continue to pile up, South Korea's Financial Supervisory Service (FSS) has stepped in with fresh guidance to help consumers navigate the tricky waters of insurance claims. On July 15 and 16, 2025, the FSS unveiled key dispute cases and important precautions, emphasizing the need for policyholders to thoroughly review their insurance coverage before seeking hospital treatments to avoid unexpected claim denials.
One of the most contentious issues revolves around nerve formative surgery, known as percutaneous epidural neuroplasty (PEN), a procedure often used to alleviate spinal pain. While some patients expect inpatient medical expenses to be covered, insurers frequently deny such claims, recognizing only outpatient costs capped at around 300,000 won. For example, a policyholder who underwent PEN surgery claimed 2 million won for inpatient care, but the insurer paid only about 300,000 won, citing a lack of medical necessity for hospitalization.
This stance aligns with the Health Insurance Review and Assessment Service (HIRA), which has published guidelines on 18 PEN cases, concluding that inpatient fees are not justified unless there are significant changes in the patient's condition or restrictions in daily activities. Courts have also weighed in, ruling that the necessity of inpatient care must be assessed by considering factors like the patient's symptoms and whether the hospital stay exceeded six hours. The FSS clarified, “Being hospitalized does not automatically guarantee inpatient medical expense coverage; the actual need for inpatient treatment must be carefully evaluated.”
Obesity treatment is another hot-button topic where insurance coverage often falls short. Procedures like stomach reduction surgery and medications such as Saxenda and Wegovy, both popular obesity treatments, are generally excluded from real-life insurance payouts. The Ministry of Health and Welfare specifies that while obesity itself is a non-covered condition, treatments for obesity-related complications like hypertension or diabetes, as well as bariatric surgeries linked to these conditions, are covered under national health insurance.
However, many consumers find themselves caught in the crossfire. One policyholder who underwent stomach reduction surgery under an obesity diagnosis (disease code E66) had their claim rejected because obesity is explicitly excluded from coverage. Another patient prescribed Saxenda for hyperlipidemia was denied reimbursement because the medication was fully non-covered and used in a context deemed not to impair daily life. Insurers have generally viewed these cases as simple weight loss efforts rather than medically necessary treatments.
Despite this, the FSS offers a silver lining: if obesity treatment procedures or drugs are prescribed for conditions like diabetes, they may fall under national health insurance, allowing real-life insurance to cover the out-of-pocket expenses. This nuance underscores the importance of clear medical diagnoses and documentation when filing claims.
Another area fraught with confusion concerns the purchase of medical device (MD) creams for skin conditions, such as atopic dermatitis or dry skin. While patients sometimes buy multiple units of prescribed moisturizers, insurers often reject claims for more than one per outpatient visit. The Supreme Court has ruled that real-life insurance covers only costs arising from “medical acts primarily performed by a doctor,” excluding expenses for additional products purchased by patients themselves.
Moreover, the FSS warned that trading medical devices like Zeroid or Atobarrier creams purchased from hospitals among individuals may violate the Medical Devices Act, highlighting legal risks beyond insurance disputes.
On a more positive note, the FSS reminded policyholders who spend extended periods abroad that they might be eligible for refunds on real-life insurance premiums. If a policyholder stays overseas continuously for three months or more, they can claim back premiums paid during that time. This refund right has been in place since January 1, 2016, and carries a three-year statute of limitations. However, the FSS cautions that refunds may be difficult to obtain after policy cancellation, urging consumers to check refund eligibility with their insurer before terminating contracts.
These clarifications come amid a backdrop of ongoing disputes over non-covered treatments, which have caused frustration among consumers and insurers alike. The FSS official emphasized the importance of consumers fully understanding their policy terms and the nature of medical acts before seeking treatment or filing claims. “Consulting with hospitals and insurance companies before submitting real-life insurance claims can prevent unnecessary disputes,” the official said.
In essence, the FSS is urging consumers to be proactive and informed. With medical treatments evolving and insurance policies often laden with fine print, a little due diligence can go a long way in ensuring that patients receive the coverage they expect without unpleasant surprises.
As the healthcare and insurance landscapes continue to intertwine, these guidelines serve as a crucial reminder: understanding the nuances of coverage, especially around contentious areas like obesity treatments, nerve surgeries, and medical device purchases, is critical for safeguarding one’s financial and medical well-being.
