Health costs of aged at a premium

Over-75 crowd confronted, confused by sudden surge in deductions from pensions


Mitsue Nozaki has enjoyed a comfortable life as a senior living on a pension for the 15 years since she retired from a major company, where she had worked for about 40 years.

But the 75-year-old, who lives alone in Toshima Ward, Tokyo, was shocked when she received an official notice in early April about her new health insurance premiums.

It showed her monthly premium would rise to ¥14,700 from ¥6,500 the previous year, as Nozaki and others aged 75 or older were placed in a new public health insurance system from April, separate from the rest of the public.

Due to the increase, her monthly pension fell to less than ¥200,000. “I still have enough to live on, but I feel I’m getting poor. It hurts my pride,” she said. “I wonder if (government officials) want us to die soon.”

Nozaki is not the only elderly citizen angry about the new public health insurance plan for — as the government calls them — “later-stage” seniors.

The defeat by a candidate from the ruling Liberal Democratic Party to a Democratic Party of Japan rival in last month’s Lower House by-election in Yamaguchi Prefecture was partly attributed to the anger elderly voters feel toward the new, LDP-backed, health premium system.

The opposition camp hopes to submit a bill Friday to the Diet to scrap the new system, while the LDP-New Komeito ruling bloc is looking to hammer out measures to mitigate the burden on some seniors under the plan.

The turmoil over the new insurance plan started in April, when the media began intensively reporting about major changes under the new system: Seniors’ premiums are automatically deducted from their pensions and higher premiums are imposed on some of the elderly.

An 84-year-old woman who lives with her daughter in Chiba Prefecture said she received little official explanation about the new plan.

“I learned about the plan by watching television and reading newspapers. But I still don’t have a clear picture,” she said, asking not to be named.

The lack of easy-to-understand information is one reason the new insurance plan is so unpopular with seniors, said Go Miyatake, a professor specializing in social security issues at Mejiro University in Tokyo.

The confusion will wane as seniors learn about the system, but concerns are expected to linger that some will shoulder a heavier burden than others, he said.

This includes about 2 million elderly who are classified as dependents being supported by families, who receive less than ¥1.8 million in annual pension and have been exempt from paying health insurance premiums.

They will have to start paying premiums from October, although they will start by paying only 10 percent of the full amount for the first six months and 50 percent for one year after this, thanks to the government wanting to reduce the impact on them.

The government says the new insurance plan is designed to share the burden of swelling medical expenses for the over-75 group fairly among the elderly and between those still working and those who have retired.

Some 13 million people — roughly 10 percent of the population — are aged 75 or older, and their annual medical costs in fiscal 2008 are expected to reach ¥11.9 trillion. As the over-75 group rapidly swells, costs are expected to rise accordingly.

Previously, most people in this age group had belonged to the national health insurance program, but it was unclear who was shouldering what portion of medical costs for those aged 75 and above.

Under the new system, seniors’ premiums cover 10 percent of their medical costs, 50 percent is covered by central and local governments and the remaining 40 percent will come from health insurance premiums paid by people aged 74 or younger.

Premiums are also newly set for each senior 75 or over to narrow regional gaps in their premiums by having the new plan administered on a prefectural, as opposed to a municipal, level.

In addition to the new insurance plan, the government also began offering new medical programs in April to take care of people aged 75 or over.

Akiko Yagi, 78, who lives with her son in Toshima Ward, Tokyo, said she worries about being able to receive the same medical care under a new family doctor program.

Elderly patients with chronic diseases can have a family doctor make an annual treatment plan for them.

The family doctor program enables seniors who pay 10 percent in medical fees at hospitals to receive basic checkups and treatment for a monthly payment of ¥600. Home doctors earn ¥6,000 per patient each month as medical fees.

The program was created to provide cost-effective treatment for elderly patients, who often go to see two or more doctors to treat various diseases, by, for instance, avoiding duplication of drugs prescribed at different clinics.

“I’m worried that (family doctors) may refrain from giving patients sufficient medical checkups and treatment” due to the limited medical fees paid to the doctors, said Yagi, who has a chronic cardiac disease.

The Health, Labor and Welfare Ministry says elderly patients can opt not to have a family doctor. If they choose to have one, they can receive additional treatment not covered by the fixed-rate family doctor program by paying additional medical expenses.

Looking at the retirees’ concerns, Miyatake of Mejiro University warned that the new insurance system may cause too much financial pain for seniors.

“When people grow old, their income usually goes down. But their likelihood of developing diseases increases. Managing them in a different framework runs against the principle of social security,” he said.

The government may again ask people aged 75 or older to shoulder a larger proportion of their medical costs in the future as the senior population rises and the younger population falls, Miyatake said.

The new system may not be sustainable even though it’s necessary for the government to try to mitigate the increase in medical costs for the aged, he said.

“We will need to come to grips with how we share medical costs — raising premiums, increasing the consumption tax or a mix of both,” he said.