The Kaigo Hoken Seido (Long-term Care Insurance System) that the government launched in 2000 had two purposes. The first was to collect monthly premiums from everyone over the age of 40 to pay for caregiving services for the ever-burgeoning ranks of the elderly; and the second was to provide employment for that other burgeoning demographic of people who needed full-time work in an economy that was increasingly shipping jobs overseas and which at home was resorting more to non-regular employees.
According to the law the system has to be reviewed every three years, and the government is now thinking of revisions for 2012. In all likelihood, premiums will be raised again, since they've been raised every time the system has come up for review in the past. The average premium for salaried employees under 65 has risen from ¥2,075 a month in 2000 to ¥4,342 in 2009; while for people 65 and older it's risen from ¥2,900 to ¥4,160.
These increases are supposed to help cover the cost of the system, which was ¥3.2 trillion in 2000, ¥6 trillion in 2005 and ¥7.9 trillion this year. Premiums provide half the money needed, with tax revenues covering the other half. People who require care pay about 10 percent of the bill out of their own pocket with the rest being paid for by the kaigo hoken system. These moneys are paid to care providers, often NPOs and even corporations that hire and dispatch licensed caregivers or run care facilities. So the money not only goes to pay workers, but also to purchase equipment and pay administrative costs. These various costs have skyrocketed in the past decade, and one of the changes that the government is contemplating for 2012 is a raise in the deductible to 20 percent. According to an article in the Yomiuri Shimbun, however, there are many elderly who are too poor right now to even cover the current 10 percent.