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The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Itoko Suzuki
December 23, 2016
According to the latest statistics from the World Health Organization (WHO), Japan is the fast growing ‘aging society’ in the world. Average life expectancy is 83.7 years and for women, it is 87.05 years. As Japan’s current 127.1 million population is rapidly decreasing due to the 1.42 fertility rate—the lowest in OECD countries—Japanese government predicts that one out of three persons will be 65 years or older by 2025, and one out of five will be over 75 year. Average “healthy life span,” defined as the period during which one can live daily life without restriction due to health reasons, is 72.74 years (for women, it is 75.61 years).
Longevity is the wish of all mankind. But it is this ‘healthy life span’ older people wish for so they can enjoy a longer life. Elderly people (in Japan, generally considered 65 years and above), are susceptible to illnesses. In fact, many have already multiple diseases. The elderly have great mental anxiety about health and declining physical ability in living daily life. Many need appropriate medical and nursing care support for their ‘healthy life span.’
Luckily in Japan, it is the government duty to support the elderly. To do so, it has established public medical and care insurances. Back in 1961, the public medical insurance system was instituted for all citizens to be enrolled. Currently, insured persons up to age 70 pay 30 percent of medical expenses. For people age 70 to 74, the fee is reduced to 10-20 percent. Those termed‘later elderly’ only pay 10 percent, except for high-income tax group needing to pay 30 percent. In 2000, to cope with the aging society, public care insurance (usually called long-term nursing care or LTC system) was created. All people age 40 and older are obligated to be enrolled.
Municipal governments run by law the national medical insurance system. In 2016, municipal governments financed 6.8 trillion yen to cover 16 million elderly persons (65-74 years old). For another 16 million ‘later elderly’ persons (75 years and above), the total public budget of 15 trillion yen is estimated with 7.1 trillion yen regional government federation finance (about 50 percent,) shared by 25 percent of national government grant, and the remaining 25 percent by prefectural and municipal governments taxes. The total of 22 trillion yen for the public medical insurance provisions for elderly (without including the elderly patients own payments) means about 4 percent of gross domestic product (GDP).
By law, public care insurance system is also run by the municipal governments. The provisions of needed services are classified into five nursing care levels and two preventive support levels. As the elderly population increases, now the public care service system for ‘later elderly’ has been separated from financially overburdened municipal governments. The responsibility is shifted to the prefectural government for policymaking and financing.
However, actual service deliveries are vested to municipal governments. Each municipal government established several ‘Integrated Community Care’ centers for convenience to the elderly so as to tap both medical and care provision advice and certification at the same center. Municipal governments certify the level and make plans for provision of the needed services to currently more than 6 million elderly persons, such as food delivery, housekeeping, nursing or preventive care services, in cooperation with care managers and various service delivery companies. The recipient elderly pay 10 percent or 20 percent of the actual expenses depending on the income level.
Local government (both prefectural and municipal) and national government share the rest of the expenses together with the insurance premiums. Government expense to the LTC in FY2012 was estimated about 4 percent of 475 trillion yen GDP. Compared to 1.4 percent in the United States, Japan’s ratio is high and even close to the highest level in OECD countries. Considering that in the U.S. even ‘“Obamacare”’ has not been very popular, Japan looks like a ‘socialistic country’ at least for the elderly.
But we have two big problems for the elderly. First, Japan’s elderly LTC is focused on ‘in-home’ care. Elderly often living alone in the home may eventually need institutional nursing care. Unfortunately, institutional care service is poor in both quantity and quality.
The second problem is how will the government continue to pay ever increasing costs. Government currently plans to increase financial burdens of the elderly for medical and LTC provisions. Elderly would need better performance of services while wishing the decreased burdens of the younger generations. Planned increase in the consumption tax (to cover the social insurance only) from current low 8 percent should not be delayed, and is imminent to sustain the current ‘socialistic’ state of Japan for incoming ‘later elderly.’
Author: Dr. Itoko Suzuki is a retired senior citizen of Japan; former chief, Branch of Public Administration and Governance, United Nations; former professor of public administration in a few universities (2000-2010) including, Ritsumeikan Asia Pacific University. She can be reached at [email protected].