After intensive debate, the Liberal Democratic Party and its two non-Cabinet allies agreed August 28 on a plan to rescue the nation’s health insurance systems from bankruptcy.

The health system plan — the most radical in years — will be implemented in fiscal 2000, increase medical bills for the aged, and install mechanisms that oblige doctors to choose less expensive methods of treatment and prescribe less expensive medicines. It will create a new health insurance system only for those aged 70 or older.

The panel is headed by Yuya Niwa, a LDP Lower House member and a former health and welfare minister. It includes representatives of the Social Democratic Party and New Party Sakigake.

Panel members agreed that all people over 70, in principle, should be made to pay premiums for the new insurance scheme. Currently, about 3.4 million elderly people pay no premium because they are covered under insurance carried by their sons or daughters as their dependents.

Under the new scheme, the panel suggested that the elderly policyholders be required to pay 10 percent of their medical bills. The elderly currently pay a fixed sum of only 1,020 yen per month, regardless of the number of hospital visits.

The 10-percent figure corresponds with a planned public nursing-care insurance system designed to help both the ailing elderly and those who take care of them at home. The government intends to introduce the nursing-care insurance system from 2000.

Under the system, expected to obtain approval from the Diet during an extraordinary session expected to convene in late September, those who receive the services would have to pay 10 percent of the cost of the services they receive.

It was suggested by the panel that public money from the central and local governments cover between 30 and 40 percent of medical bills for the elderly policyholders of the new scheme. The input of tax money would be indispensable at a time when the nation is graying rapidly, Niwa said.

The new insurance scheme would lead to a much greater financial burden on the elderly, who are currently under protection regardless of their income and are required to pay much less for their medical bills than younger patients.

Of the 27 trillion yen the nation spends annually on medicine, about one third is spent for treating the elderly. However, 70 percent of the medical cost for the elderly is borne by premiums paid by the younger generation.

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