This month's featured article
Future of Japan's Long-term Care Insurance Program
SHIMIZUTANI SatoshiConsulting Fellow, RIETI
Long-term Care Insurance Program and a rapid increase in expenditures
The debate on social security system reform in Japan is now entering a crucial stage. On July 29, 2013, the government's National Council on Social Security Reform approved the general context of the final draft of its report calling for creating a "21st (Year 2025) model" of social security. Specifically, it proposes a shift from the current age-based burden sharing to a capacity-based one. The final and full report is expected to be delivered on August 6, 2013.*
The report is expected to set a direction for reforming the public Long-term Care Insurance Program introduced in April 2000. Since then, Japan's long-term care expenditures (including expenses paid out of pocket by users) more than doubled from four trillion yen in fiscal 2000 (April 2000 through March 2001) to 8.4 trillion yen in fiscal 2011. The government estimates that such expenditures will continue to rise to about 20 trillion yen, or 3% to 4% of gross domestic product (GDP), in fiscal 2025.
A sharp increase in demand for long-term care services against the backdrop of a rapidly aging population is one big factor behind this. We must also not overlook the fact that the household structure has changed significantly over the years. An increase in the proportion of nuclear families and single-person households has resulted in a decrease in the supply of family care.
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