It's not about the mortality rate per se. It's about the number of hospital beds, and specifically ventilators, vs. the number of people who need them. And of course if too many people need ventilators, some people aren't going to get them, and the death rate will go up from that 0.5% (that's what it is in South Korea right now BTW, not 1.5%).
Keep in mind that the number of cases also goes up exponentially, not linearly. Research shows without quarantines, the number of cases roughly doubles in about six days. That means if we have 10K cases one day, we have 20K six days later, then 40K,