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Japan’s Health Care Support for Elderly Revisited

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Itoko Suzuki
January 31, 2017

Japan’s health care “socialism” for the elderly — still sustainable?

On his first day in office, the new U.S. president issued an executive order to seek to repeal Obamacare. Japan’s government run medical care system (long term nursing care, or so called LTC) has also been reviewed since my last column published on December 23, 2016. The main issue is balancing a reduction in government burden while leaving no one without care. In Japan, citizens are lucky it is the government’s responsibility to provide universal healthcare. Japan’s record setting longevity and high “healthy life span” of the elderly has been largely due to the benefits from the two public insurances, medical and LTC.

Universal healthcare in Japan means medical and care services are available for all citizens — rich or poor — equally through social insurance methods which clarify the relationship between service provisions and burdens: 50 percent comes from insurance premiums, and the rest is shared equally by national and local governments; premiums and out-of-pocket payments are fixed by the government(30 percent of service cost till the age 70; 10 to 20 percent between age 70 to 74; and 10 percent for “late elderly” meaning age 75 and above; higher income elderly pay a maximum of 30 percent).

In 1961 it became mandatory for all citizens to be enrolled in the public medical insurance system. In 2000, it became obligatory for all citizens above the age of 40 to be enrolled in LTC insurance as a way of coping with the ageing society with aim to reduce family members’ burden in their elderly care.

elderlyFortunately, in Japan, medical service fees are also regulated much lower than in the U.S. even for private sector hospitals and medical doctors, including dentists. Additionally, new high level medical treatments that may cost over 80 million yen a year (about US$80,000) can be mostly subsidized by the government.

In Japan, it has been the local (both prefectural and municipal) government which actually manages the public insurances. A 2016 revision by the “Act Securing Hometown Medical and Long-Term Care, etc.” tried to promote integrated service delivery to include both medical and LTC for those ages 65 and above. Each municipality established several community centers at each middle or primary school district, so the elderly living nearby can easily tap into the needed services. Insurance premiums and out of pocket fees for the elderly were raised by this reform.

Current Issues

Japan’s elderly healthcare system has been facing the following critical issues to be solved.

  • Issue 1: Government overburdened with rapidly increasing elderly

In 2016, medical costs were estimated at 42 trillion yen with 30 percent spent for “late elderly”. It is estimated to increase to 62 trillion yen by 2025. LTC costs were estimated at about 10 trillion yen, and is estimated to reach over 18 trillion yen in 2025.

  • Issue 2: Rapid increase of “late elderly” (age 75 and above) and “super elderly” (age 90 and above) and their living alone at home

The government now estimates the elderly population (age 65 and above) is about 26 percent of the whole population and those ages 75 and above make up about 13 percent of the population. The ageing population from age 65 shows radical increase and the ratio of increase from age 75 to “super elderly” age 90 is becoming even higher. About 24 percent of the elderly population is living alone at home, but would increase to 26 percent by 2025.

Japanese academics now propose the definition of elderly from age 65 to 75. They propose to define those ages 65 to 74 as “associate elderly” “who may become supporters of the elderly”. The idea, not very popular, might activate their life and help reduce nursing care cost.

  • Issue 3: Lack of care takers and their low wages

Many care takers quit their jobs feeling obliged to take care of elderly at home. They are not motivated to rework as a care taker’s salary is lower than the average workers of all industries.

  • Issue 4: Few and sub-par nursing homes

The elderly even living at home with care services would eventually need nursing care facilities which are poor in both quantity and quality. Younger family members still owe their care burdens by often quitting their jobs.

Elderly health care reforms

Government must attend to these issues quickly so the public medical and LTC insurance system can be sustained in the future, and avoid not leaving the current government debts to younger generations. For now, the government plans to increase affordable elderly burdens to pay 30 percent from current 20 percent limit together with the increase of premiums as of August 2018. Planned social insurance tax will increase to 10 percent, or even more in the future. It must be hastened. Several municipalities now plan to de-regulate the LTC services to promote the mixed (public and private) care service provision by the same care takers. Other plans will soon follow.

Reforms would involve struggles for the elderly. Government must, after all, serve all the people and keep them safe and in good health — effectively, efficiently and with equity.

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].

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