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New insurance plan ups burden on ‘later-stage’ seniors

by Akemi Nakamura

Following are questions and answers about the new health insurance plan the government introduced in April for people aged 75 and above:

What is the new health insurance system the government introduced in April?

The insurance plan covers so-called later-stage seniors — people aged 75 or older — and bed-ridden people aged between 65 and 74. Foreigners with a residence visa who satisfy the conditions join the system.

A main purpose of the new plan is to narrow the gap in premiums among seniors.

Previously most people aged 75 and above were covered by the national health insurance system, managed by about 1,800 municipal governments. So their premiums differed depending on which cities, towns or villages they lived in, because wealthy municipal governments offered financial assistance to lower the premiums.

Under the new system, the municipal governments formed 47 prefecture-based organizations — one in each prefecture — to manage the insurance plan for the elderly under their jurisdiction. Seniors with the same income who live in the same prefecture will thus pay the same premium.

The percentage of costs seniors pay at medical institutions, when they receive treatment, are the same, which is 10 percent or 30 percent of overall medical fees.

Why did the government draw a line between age 74 and 75 to create the new insurance system?

People aged 75 or above had been handled under the Rojin Hoken Seido (Elderly Health-Care System), while belonging to the national health insurance program.

Their medical costs had been covered by the central and local governments and public health insurance programs, including the national insurance program for the elderly and self-employed, corporate insurance plans for company employees, and the government-managed insurance plan for public servants.

The government abolished the old system and created the new insurance program.

How much do retirees pay in premiums?

An average premium for an elderly person who lives on basic monthly pension of ¥66,000 comes to ¥1,000 monthly, while the corresponding figure for a senior who receives ¥167,000 stands at ¥5,800, according to the Health, Labor and Welfare Ministry. Premiums vary depending on seniors’ income and medical costs in each prefecture and are revised every two years.

What is the major difference between the old and new insurance systems?

Under the old system, elderly people used to pay their premiums at municipal offices or from their bank accounts. But under the new plan, the premiums of those who receive ¥180,000 or more in annual pension — some 8.32 million people — are deducted from their pensions.

Seniors complained about the deduction because it reduces the money they receive. But the government says the deduction streamlines administrative operations and is a convenient payment method for the aged.

The first deductions on April 15 confused the elderly because some municipal governments mistakenly deducted premiums from the pensions of those who are not subject to the new plan. But 31 cities postponed the deduction until October due to administrative delays.

Has the financial burden on the elderly increased under the new system?

Some people’s premiums have increased. About 2 million elderly dependents, whose annual income is less than ¥1.8 million, have been exempt from paying health insurance premiums but are required to pay premiums from October under the new plan.

But some seniors’ premiums went down as the annual maximum premium was reduced to ¥500,000 from ¥530,000 under the new system.

Are there penalties for those who fail to pay premiums?

Yes. People who fail to pay the premiums for a year will lose their health insurance cards and instead be given qualification cards. Those with qualification cards are required to pay all fees at medical institutions when they receive treatment. They can get refunds when they pay off outstanding premiums.