Japan's government said it plans to reduce medical insurance coverage for some elderly citizens to curb ballooning costs that are forecast to reach as much as 40 trillion yen, or $345 billion, in 10 years. 

The government said it aims to cut payments made under the state-run medical insurance program by 7.5 percent over the next 10 years, and by 12.5 percent over the next 20 years, the Health and Welfare Ministry said in a statement today. 

The ministry's proposal will raise payments for those between 70 and 75 years old to 20 percent of total medical bills from 10 percent. Those between 70 and 75 with higher income will pay 30 percent, up from 20 percent. People between 65 and 69 will benefit under the proposal, paying 20 percent of total medical costs from 30 percent. 

Governments medical insurance payouts are expected to total 28.3 trillion yen in the year ending March 2007, the ministry forecast. Under the new plan, the ministry said it aims to cut 3 trillion yen off medical costs in the year ending March 2016, which is 7.5 percent less than the current forecast. 

The ministry also forecast medical cost at 49 trillion yen in the year ending March 2026, 12.5 percent lower than the current 56 trillion yen projection.

The plan also focuses on prevention of diseases, especially diabetes, high-blood pressure and obesity that can be caused by lifestyle choices. The government plans to cut the number of people suffering such ailments by 25 percent over the next 10 years, the proposal said. 

Medical coverage for those diseases total about 10 trillion yen, about a third of Japan's total medical costs, the ministry said. 

Japan has 16.2 million diabetes patients or those vulnerable to the disease. People suffering from or vulnerable to high blood pressure total 51 million, the ministry said. Japan has a population of about 127 million.