［February 2018］
28-Health Insurance System – A Year of Local Governments in Japan

February is the peak of the cold and flu season in Japan and this year has seen the highest number of patients, approximately three million per week, present to hospitals and clinics for treatment.

The Japanese central government introduced health insurance in 1922 and established universal health insurance coverage in 1961. It encompasses two major insurance programs, namely, the Employees’ Health Insurance program for employees and their families and the National Health Insurance program for non-employees, such as independent business people and retirees.

Although the Employees’ Health Insurance program is managed by company-specific Health Insurance Societies consisting of employees, the National Health Insurance Program is operated mainly by municipal governments. People aged 75 years and above subscribe to a late-stage medical care system for the elderly which is jointly operated by the municipal and prefectural government.

Patients under the National Health Insurance program only need to pay a co-payment fee of 30% of their medical fees at reception, granting them access to all kinds of medical treatment. This provides patients with great access to medical treatment but also causes the inflation of national medical expenditure. Consequently, most municipalities, especially those with less than a thousand National Health Insurance program subscribers, bear huge deficits and operational challenges due to the cost of managing the National Health Insurance program.

To solve this problem, National Health Insurance reform is underway with the prefectures taking over the management of the program from the municipal governments this April. Although resident health and welfare has always been the responsibility of the municipal government, due to Japan’s aging society and shrinking population it is becoming increasingly difficult for local governments to perform these duties.

Katsunori Kamibo

Director