In a recent case involving the question of whether an amount exceeding the co-payment ceiling under the National Health Insurance Act (the “NHIA”) can be covered by first-generation indemnity medical insurance (the “First-Generation Insurance”)[1], the Supreme Court held that any amount exceeding the co-payment ceiling and reimbursed by the National Health Insurance Service (the “NHIS”) is not covered by the First-Generation Insurance (Supreme Court Decision 2023Da283913, January 25, 2024).
The policy clauses of the First-Generation Insurance did not specify whether amounts exceeding the co-payment ceiling could be covered, leading to disputes over the coverage. On the one hand, the lower court ruled that any amount exceeding the co-payment ceiling can also be covered by indemnity medical insurance, citing Article 5 of the Act on the Regulation of Terms and Conditions, which states that unclear terms and conditions should be interpreted in favor of customers. However, the Supreme Court overturned this decision, citing the provisions stipulated in the policy statement and policy clauses.
The Supreme Court’s decision can be summarized as follows:
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The risks covered by the rider in question (the “Rider”), which is a type of non-life insurance, are limited to property damages arising from hospital treatment fees due to the insured’s illness, that is, the portion of medical care benefits to be paid by the insured and the non-reimbursable portion as defined under the NHIA.
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It is reasonable to interpret that the coverage under the policy clauses of the Rider is applicable only to the amount ultimately borne by the insured from the medical care benefits provided under the NHIA. Any amount exceeding such benefits is not covered by the Rider.
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Therefore, any amount exceeding the co-payment ceiling under the NHIA and reimbursed by the NHIS to the insured does not fall within the Rider’s coverage scope.
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As the policy clauses of the Rider are not ambiguous, this does not constitute a case where the meaning of the terms and conditions must be construed in favor of customers.
The Supreme Court’s decision is significant as it provides a precedent affirming that any amount exceeding the co-payment ceiling and reimbursed by the NHIS to the insured is not covered under the First-Generation Insurance. The Supreme Court’s decision is also meaningful as it provides a legal basis for such cases, highlighting that the contra proferentem rule does not apply when the policy clauses are clear.
[1] First-Generation Insurance: Indemnity medical insurance sold until the implementation of the standard terms and conditions for indemnity medical insurance in October 2009.
