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Revision of the Long-term Care Insurance System in Japan

Japan has undertaken the first major revision of its Long-term Care Insurance System (LTCI). LTCI is a national insurance program instituted in April 2000. This insurance program was enacted in response to an emerging awareness in Japan that satisfactory service delivery for older people requires the commitment of not only their families but also their community and the public sector.

LTCI is one of three major national insurance programs in Japan that include old age pension and medical insurance systems. The law that created the LTCI system mandated a revision of the program every five years. Since the Diet passed the first of these reforms in June 2005, implementation of this reform package was carried on.

The main features of this reform package include: 1) making the program sustainable fiscally and in other respects, 2) incorporating preventive care as a major service component, 3) intensifying the relation with other social insurance programs such as medical insurance or public pension scheme and 4) promoting "Aging in Place."

With rapid growth in the use of services offered under LTCI, the overall cost of this insurance system increased every year since its inception, doubling in amount from 2000 to 2005. LTCI in Japan is currently financed in several ways. Users of services pay a ten percent co-payment for most services, with taxes and insurance premiums each covering half of the remaining 90 percent. Persons aged 40 and over are all obligated to pay insurance premiums. If the cost of LTCI continues to escalate at its current rate, in order to remain fiscally balanced, the program would have to substantially raise its insurance premiums. The reform package aims to avoid such an outcome and to make LTCI a sustainable program.

Overview of the Revision of the Long-term Care Insurance SystemPDF

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