40% of Japan's health insurance unions on course to dissolve by 2022 as costs for elderly rise


Over 40 percent of health insurance unions known as kenpo, mainly for employees of large companies, are facing increased pressure to dissolve themselves by fiscal 2022, reflecting sharp increases projected for their contributions to the medical system for the elderly, it was learned Thursday.

The National Federation of Health Insurance Societies, or Kenporen, estimates that the number of kenpo unions with premium rates of 10 percent or higher will surge from 302 in fiscal 2019 to 601 in fiscal 2022, accounting for about 43 percent of them, according to sources with knowledge of the matter.

Pressure on such unions to disband and transfer members to the Japan Health Insurance Association, which operates mainly for workers at smaller firms, is expected to increase, because the average premium rate among workers who participate in the state-subsidized association, also known as Kyokai Kenpo, is only around 10 percent.

In the meantime, Kenporen project that total contributions for the elderly made from kenpo unions to the medical system will rise from ¥3.4 trillion in fiscal 2019 to ¥3.9 trillion in fiscal 2022, because baby boomers are beginning to turn 75.

The average premium rate among kenpo unions is projected to rise from 9.2 percent to 9.8 percent, and the average premium payment per member per year is projected to reach about ¥550,000 in fiscal 2022.

In fiscal 2025, when most baby boomers are 75 or older, the average premium rate among kenpo unions is forecast to reach 10.4 percent. The proportion of kenpo unions with premium rates of 10 percent or higher is estimated to rise to 65 percent.

Kenporen is set to release the estimates at a news conference Monday.

Based on the estimates, the group plans to step up its request for increases in the proportion of medical fees for people 75 or older that they cover by themselves, from the current 10 percent to 20 percent.

Kenporen is also poised to urge the government to carry out the consumption tax hike to 10 percent in October, as scheduled.