Health, Labor and Welfare Minister Akira Nagatsuma has declared that the government will abolish the unpopular health insurance system for the eldery that includes a plan for so-called later-stage seniors, or people aged 75 or over. But it is unclear when the system will be abolished and what shape a new system will take. The government should handle the issue carefully to avert public confusion.

Currently later-stage seniors and early-stage seniors (65 to 74 years old) belong to different health insurance plans. In introducing the current system in April 2008, the government said medical treatment for later-stage seniors tends to be prolonged, thus pushing up the nation's total medical costs. Having a health insurance plan especially for people aged 75 or over makes it easier to measure their medical costs, and if "later-stage" medical costs increase, premiums could be raised accordingly.

Yet, the medical reason for dividing people aged 65 or over into two categories is weak, since both groups are prone to similar health problems. There is also the possibility that the health insurance plan for later-stage seniors may face financial difficulties eventually because many of the participants have low incomes, with 60 to 70 percent of them relying on public pensions.

The scheme is maintained by tax money, which covers 50 percent of the total cost, with "support money" from younger working people's health insurance associations covering 40 percent, and premiums paid by participants in the plan covering the remaining 10 percent. At medical institutions, participants pay 10 percent of treatment costs (30 percent if incomes are higher). Premiums and medical fees may place a heavy financial burden on some participants.

In fiscal 2008, medical benefits from the plan amounted to some ¥11.3 trillion. At this rate, it will become increasingly hard for younger working generations to support the plan. In short, ensuring the plan has a firm financial base is but one of many problems. Hastily abolishing the current plan will create even more problems. The government and political parties should consider tax reform to get the necessary funds.