Lawmakers OK health care reforms to address growing costs for the elderly

Kyodo

Japanese lawmakers approved health care reforms on Wednesday to address the rising costs of elderly care, with increased cost-sharing by high-income workers and prefectures taking over the running of loss-making public insurance bodies from municipalities.

The legislation passed the Upper House after being endorsed by the more powerful Lower House in late April.

Other steps to restrain health care spending include increased meal costs for inpatients and additional payments for seeing specialists at large hospitals without a doctor’s referral.

An estimated ¥39.3 trillion was paid to medical institutions for treatment of illness and injuries in fiscal 2013, up 2.2 percent from a year earlier. The increase stemmed chiefly from a growing number of elderly people and rising costs to cover advanced medical services.

The nation meets its medical costs with a mix of disbursements from public health care plans, tax revenues from the central and local governments, as well as payments by patients.

Among several categories of public health insurance, plans that cover the self-employed, those on nonregular employment contracts and people without jobs are susceptible to losses.

A growing number of subscribers to these plans are low-income earners, meaning that premiums paid per subscriber tend to be low, making the plans vulnerable to increasing medical costs.

The plans, which are managed by municipalities, had 34.66 million subscribers as of March 31, 2013. The average of subscribers was 50.4 — higher than that of subscribers to public insurance plans for salaried workers or government employees.

Starting in fiscal 2018, these loss-making plans will be managed by prefectural governments.

Takashi Oshio, a professor of public economics at Hitotsubashi University, said this management shift from municipalities is “a realistic approach,” given deteriorating finances along with the aging of subscribers. Municipal governments have been paying around ¥300 billion annually in recent years to make up for the losses.

Under the new law, increased premiums will hit employees at big businesses as well as government employees, as a result of a change in the formula used to compute health care costs for people aged 75 or older.

Beginning this fiscal year, a greater component of contributions to elderly care in each insurance plan will be calculated as a proportion of subscribers’ gross income in place of the number of subscribers.

Meal costs for inpatients will rise from the current ¥260 per meal to ¥360 in fiscal 2016 and to ¥460 in fiscal 2018, while a visit to a big hospital without referral will cost an additional ¥5,000 to ¥10,000 starting in fiscal 2016.

  • Shiki Byakko

    Making a realistic health care that addresses the problem of the actual health costs and the unfair distribution by age is far to problematic.
    So, when in doubt, RISE TAXES.