South Korea is experiencing a rapid demographic transition, with the proportion of older adults projected to exceed 20% by 2025. This unprecedented pace has intensified the demand for healthcare and social support, creating complex challenges in the management of multimorbidity, frailty, and functional dependency. Historically, Korea has relied on a rigid, provider-centered model, with healthcare financed through National Health Insurance and long-term care through long-term care insurance. Although these systems expanded service availability, they also entrenched fragmentation between long-term care hospitals and nursing homes. Recent reforms mark a paradigm shift toward person-centered, integrated care. The Community Care pilot programs (2019–2022) and the Integrated Community Care Support Act (2024) introduced coordinated models that link healthcare, housing, and social services under local government leadership. Evidence from domestic and international studies underscores the risks of prolonged institutionalization and highlights the benefits of integrated approaches, including reduced hospitalizations, improved functional independence, and higher satisfaction among older adults and their families. At the same time, experiences from Korea and Japan suggest that institutional care remains indispensable for individuals with high medical needs or at the end of life, emphasizing the need for balanced strategies. Successful implementation of the 2026 reforms will require redefining the role of institutions, expanding community-based alternatives, developing a professional care manager workforce, achieving interoperability of data systems, and undertaking financing reforms to align incentives. Beyond structural change, embedding a cultural ethos that values dignity, autonomy, and personhood will be essential. Korea’s evolving model not only responds to urgent demographic challenges but also offers lessons for other aging societies.