Health Insurance for Elderly Needs Clarifying

The Yomiuri Shimbun

May 13, 2008

Japan

The new medical insurance system for people aged 75 or older has been severely criticized. In addition to its apparently thoughtless name--literally, "a health insurance system for people in the latter stage of their advanced age"--the system lacks due consideration to its subscribers in many respects. Although it is a major systemic change for people aged 75 or older, the Health, Labor and Welfare Ministry and local governments have failed to sufficiently prepare for the new system and adequately explain the nature of it to the public.

In addition, the ministry has presented only the vaguest estimates of how many people would see an increase--or a decrease for that matter--in their financial burdens when the new system takes effect. Consequently, it is natural that the elderly people concerned are angry about the new system.

It is necessary for the government and the ruling parties to adequately explain the purposes of and reasons for the new system to the public while also hurriedly examining the system's status quo to identify all problems involved in it.

The newly introduced system was preceded by a similar system covering people aged 75 and older. The latter system was designed to help cover the medical costs incurred by its subscribers when they consulted doctors, although they remained insured under national health insurance programs administered by their city, town and village governments. When their medical costs have exceeded expectations, the increase has been covered by contributions from mainly corporate health insurance societies.

===

Old system lacked clarity

However, under the previous system, it was not clear to what extent working generations should bear the burden of covering medical costs for the elderly. It also was unclear who was responsible for limiting medical costs for people aged 75 or older to necessities.

The new system incorporates an independent accounting scheme for which each prefecture-level operational organization is held responsible--a departure from the previous ambiguity about who should pay how much to cover elderly people's medical fees. By transferring managerial responsibility from the previous city, town and village level to the prefectural level, public finances for medical insurance are expected to be stabilized.

The new system also includes a system that requires elderly people with higher incomes to pay their due share of medical insurance premiums and specifies how much of the health insurance premiums paid by working generations is assigned to medical costs for the elderly.

As the rules on the distribution of the burden of medical costs for the elderly is made clear, the new system is likely to be seen by the public as a cold and callous way to treat the elderly.

===

Clearer picture

But making clear the relationship between the burdens of insurance premiums and benefits also clarifies the respective limits of premiums elderly people and working generations are required to pay. That will lead to discussion as to how to secure financial resources to cover future medical and social service costs.

The general direction of the new system is in line with one intended for a rapidly aging society, but its details are problematic.

The calculation formula for the insurance premiums under the new system is complicated and difficult to understand. As the central and local governments have failed to explain the new system to the public in a comprehensive and detailed way, people facing additional burdens are prompted to complain and lose trust in the system.

Some people are confused after local governments ended the practice of reducing or eliminating local taxes for low-income households and the disabled when they switched to the new system.

There also is a deep-rooted misunderstanding among elderly people that they are required to have their premiums deducted from their pension payments, in addition to those they paid under the old system.

It is important for the central and local governments to adequately explain the new system and take necessary measures.

Copyright © Global Action on Aging
Terms of Use  |  Privacy Policy  |  Contact Us