More than 5 million households who do not receive health insurance coverage through an employer are set to see their monthly contributions drop by an average of 36-thousand won next year following Cabinet approval of a revision to the National Health Insurance Act.

According to the Ministry of Health and Welfare on Tuesday, enforcement decrees of the health insurance act affecting local subscribers are a part of the second phase of insurance reforms set to take effect on Thursday.

The reforms were enacted after the insurance program's equity was called into question, with the monthly contribution calculated for local subscribers based not only on their income but on their assets and vehicle ownership as well, a formula not applied to employed subscribers.

The revised income-based calculation reduces the contribution rate levied on assets and vehicles, while applying a fixed rate for income.

Meanwhile, dependents of employer-sponsored insurance subscribers with a taxable annual income of more than 20 million won will be transferred to the local subscription system.