The government plans to spend about 9 trillion won ($7.8 billion)over the next five years to sharply increase state insurance coverage for four major categories of illness.

The Social Security Commission, a top government panel on welfare policies, discussed Wednesday the healthcare overhaul designed to relieve the financial burden of patients of cancer, heart disease, cerebrovascular disorder and rare and incurable diseases.

Under the plan, patients’ average contribution to treatment costs for the most serious diseases is expected to be cut by up to 40 percent, the Ministry of Health and Welfare said. It is a key campaign pledge by President Park Geun-hye.

The ministry said the state insurance would apply to all essential treatment for the four diseases by 2016. The coverage will start with ultrasound scans in October and would gradually expand to other costly items including anticancer drugs, surgery, surgical materials and MRIs.

Patients will be charged a minimum amount of medical costs ranging from 5 to 10 percent of the total. The government has promised to ensure that the annual medical costs per person will not exceed 5 million won.

The health ministry estimates that there are a total of 1.59 million patients of the four diseases, each spending an average of 940,000 won a year.

“But with the new health plan, the patients’ share of costs will be substantially reduced to 340,000 won on average this year. It will further go down next year and so on as the new system covers more and more services each year,” an official at the ministry.

Other treatments which lag behind in terms of cost-effectiveness, but are increasingly demanded by patients and doctors, will be classified as “selective medical services” and will be partly covered by the state insurance program.

The selective medical services often include treatments with the latest technology such as the use of capsule endoscopy and ultrasonic scalper. The new insurance program will also partly cover optional surgeries such as breast reconstruction for cancer patients who went through a mastectomy.

Services that are not aimed at treating the four diseases, such as plastic surgery and beauty care, will be excluded from the state insurance coverage, officials said.

The planned overhaul will be completed before President Park’s term ends in 2018, they added.

Critics cast doubts on the government’s ambitious health reform, saying it lacked feasibility and consistency.

The government plans mostly to use funds managed by the state-run insurance operator and some from the government budget.

But, industry insiders question the government’s capability to secure more budget as it plans to expand insurance coverage to other diseases, starting in 2017.

“It is clear that the government will suffer from a huge deficit or possibly pass the financial burden to the next administration because insurance costs will go up fast when there is no additional income source,” an expert on medical industry said. He said that the government planned to raise insurance fees an average 2.6 percent, even less than the 3.04 percent rise over the last five years.

The plan could cause wider health disparities as patients suffering from other diseases won’t get benefits from the plan at least for the next four years.

“Patients with the four diseases have been enjoying relatively higher benefits than other diseases so far. The envisioned plan would widen medical disparities even more,” said professor Kim Jin-hyun of Seoul National University.

Patient groups also criticized that the plan excluded other crucial medical expenses such as costs imposed when patients get treatments from doctors of their choice and when they upgrade their hospital rooms. President Park promised that she would also have national insurance program cover the two services, saying they also imposed a huge financial burden on patients and their families. The government said it would come up with a follow-up plan by the end of the year.

By Cho Chung-un (christory@heraldcorp.com)