Japan's Universal Health Insurance System: A Simple Guide

Japan's Universal Health Insurance Coverage Explained Even for Rabbits

Introduction

Hello everyone. Today, I'm going to talk about Japan's pride and joy: the "Universal Health Insurance" system. When you go to the hospital, do you just hand over your insurance card without thinking much about it? Actually, behind this small card lies a wonderful system built over more than 60 years.

Universal health insurance means a system where all citizens join some form of public medical insurance and can receive necessary medical services. Because of this, everyone in Japan can receive high-standard medical care with relatively low out-of-pocket costs.

"But it sounds difficult..." Don't worry if you thought that! In this series, I'll explain it simply enough for even a rabbit to understand. Let's learn together while hopping along!

History of Universal Health Insurance Coverage

The Path to Universal Health Insurance

The history of Japan's medical insurance is surprisingly old, dating back to the Health Insurance Act enacted in 1922 (Taisho 11). Initially, it targeted only some workers, but its scope was gradually expanded.

In 1938 (Showa 13), the National Health Insurance Act was enacted, starting medical insurance for local residents. However, at this point, it was still voluntary enrollment and didn't cover all citizens.

"Even I, as a rabbit, think it's wrong for many people to die because they can't see a doctor..."

The 1956 White Paper on Health and Welfare states that "nearly 10 million low-income people have been left behind by the tracks of recovery." Until this era, about 30 million people, roughly one-third of the population, were not enrolled in public medical insurance, and the road to universal health insurance was still long.

Realization of Universal Health Insurance Coverage

The turning point was the "New National Health Insurance Act" enacted in 1958. This law made it mandatory for all municipalities to implement National Health Insurance operations by April 1, 1961. And in 1961, Japan finally achieved universal health insurance coverage. At that time, only four countries in the world had medical security covering more than 90% of their population, and Japan became the fourth country in the world to achieve universal coverage.

"Japan was surprisingly progressive! Hop hop!"

How Universal Health Insurance Works

Types of Public Medical Insurance

Japan's public medical insurance is broadly divided into two types.

1. Employee Insurance: Health insurance for company employees and their families, etc.

   • Health Insurance (employees of large companies and their families)
   • Japan Health Insurance Association (Kyokai Kenpo) (employees of small and medium-sized enterprises and their families)
   • Mutual Aid Associations (public servants and their families), etc.

2. Regional Insurance: Insurance for self-employed people, the unemployed, etc.

   • National Health Insurance (self-employed, unemployed, students, etc.)
   • Medical Care System for the Advanced Elderly (seniors aged 75 and over)

"No matter which burrow you live in or what kind of work you do, you can join the insurance!"

System of Premiums and Burden

The method of paying premiums varies depending on the type of insurance.

• Employee Insurance: In principle, the employer and the insured person share the burden equally.
• National Health Insurance: Premiums are calculated for each household based on income and assets.
• Medical Care System for the Advanced Elderly: In principle, a combination of a "per capita rate" (fixed amount) paid equally by all insured persons and an "income-based rate" based on income.

The out-of-pocket ratios for medical expenses are basically as follows:

• Preschool children: 20%
• People under 70: 30%
• People aged 70 to 74: 20% (30% for those with income levels comparable to active workers)
• People aged 75 and over: 10% (30% for those with income levels comparable to active workers)

The remaining 70–90% is paid by public medical insurance. This funding is covered by insurance premiums and public funds (taxes).

"If it's 10 carrots 🥕, I only have to pay 3 myself!"

The Feature of "Free Access"

One of the major features of Japan's medical system is "Free Access." This is a system where patients can freely choose their medical institutions and treatment methods.

"When my stomach hurts, I can go to internal medicine; when my tooth hurts, I can go to the dentist—I can go anywhere freely! Hop hop!"

Free access allows patients to be seen directly by specialists, enabling rapid diagnosis and treatment. However, there are also challenges, such as this leading to congestion at medical institutions and unnecessary medical visits.

Characteristics of Universal Health Insurance and Global Comparison

Characteristics of Japan's Universal Health Insurance Coverage

Summarizing the main features of Japan's universal health insurance system:

1. Covers all citizens: Every citizen is enrolled in some form of public medical insurance.
2. Low out-of-pocket costs: 70% to 90% of medical expenses are covered by insurance benefits.
3. Free Access: Patients can freely choose their medical institutions.
4. High medical standards: Advanced medical technology and high-quality medical services.

"It's a system that rabbits all over the world would envy!"

Comparison with Medical Insurance Systems Around the World

Medical insurance systems in the world can be broadly categorized into the following three types:

1. Social Insurance Model (Japan, Germany, France, etc.)

   • Premiums are the primary source of funding.
   • Japan uses the social insurance model, but about 40% is covered by public funds (taxes).

2. Tax-Based Model (UK, Sweden, etc.)

   • Taxes are the primary source of funding.
   • Medical care is basically free, but free access is often restricted.

3. Private Insurance Centric Model (USA, etc.)

   • Medical care is primarily obtained through private insurance.
   • Public insurance is only for the elderly or low-income earners.

"It sounds like it's tough in America without insurance. I'm glad I was born in Japan! Hop!"

For example, there are differences in the following points between countries:

• Out-of-pocket expenses: While Japan generally has a 30% copayment, it is generally free in the UK and Germany (though some co-payments exist).
• Access method: Japan has free access, but in countries like the UK and France, there is a system for accessing specialists through a primary care physician (family doctor).
• Number of hospital beds: Japan has a high number of hospital beds per population, and medical equipment such as CT and MRI scanners are well-distributed.

Challenges of Universal Health Insurance

Aging Population and Fiscal Issues

While the universal health insurance system has many advantages, it faces various challenges as the aging society progresses.

"Rabbits have short lives, but humans live a long time, don't they?"

Japan is aging at a speed unprecedented in the world, and medical and nursing care costs are skyrocketing. As the proportion of elderly people continues to increase, a further surge in social security expenses is predicted.

The 2025 Problem

A particularly significant milestone is the "2025 Problem." In 2025, all of the baby boomer generation (born between 1947 and 1949) will be 75 or older, and Japan will become a super-aged society where about one in five citizens is a senior aged 75 or over.

Along with this, the following challenges are expected to arise:

1. Increased demand for medical and nursing care: Medical and nursing costs skyrocket, especially once people reach 75 or older.
2. Decrease in the working-age population: A shortage of funding for social security due to the decrease in the population of those supporting the system.
3. Increase in dementia patients: It is predicted that the number will reach approximately 7 million (about one in five seniors) by 2025.

"If there aren't enough doctors, I might not be able to get checked even if I'm not feeling well... that's scary, hop!"

Fiscal Sustainability

Medical expenses continue to increase every year, and their sustainability is a major issue. The question is how to respond to problems such as the increasing burden on the working generation and the deterioration of the country's finances.

Support payments from the working generation for the Medical Care System for the Advanced Elderly are on an upward trend, making the burden on the younger generation heavier. Additionally, the increase in social security costs is one of the causes of the national fiscal deficit.

Future Outlook and Countermeasures

Medical System Reform Efforts

To make the universal health insurance system sustainable, the government is proceeding with various reforms.

1. Optimization of Medical Expenses

   • Promoting the use of generic drugs (after-market drugs).
   • Promoting the functional differentiation and cooperation of medical institutions.
   • Standardizing medical care and optimizing redundant tests and medications.

2. Reviewing the Burden

   • Raising the out-of-pocket ratio for high-income seniors.
   • Making the burden fairer by considering financial assets, etc.

3. Establishing a Community-based Integrated Care System

   • Creating a system where housing, medical care, nursing care, prevention, and lifestyle support are provided integrally.
   • Promoting home medical care.

"It's best to prevent illness before you get sick! It's the same for both rabbits and humans, hop!"

The Future of Universal Health Insurance

To continue protecting the universal health insurance system, it is essential to balance the sustainability of the system with the quality of medical care. To achieve this, the following directions are considered:

1. Strengthening Preventive Medicine and Health Promotion

   • Promoting prevention of lifestyle-related diseases, early detection, and early treatment.
   • Controlling medical expenses by extending healthy life expectancy.

2. Improving Medical Efficiency and Utilizing ICT

   • Promoting the spread of electronic medical records and online consultations.
   • Improving the quality and efficiency of medical care through the use of AI and Big Data.

3. Reconsidering the Division of Roles Between Public and Private Sectors

   • Reviewing the scope covered by public insurance.
   • Cooperation with private insurance.

"If everyone shares their wisdom, I'm sure we'll find a good way!"

Summary

Japan's universal health insurance system is an important foundation that guarantees access to medical care for all citizens and supports a healthy and secure life. Since its realization in 1961, it has developed as a medical system the world can be proud of.

While facing various challenges due to the progress of an aging society, we are required to move forward with reforms toward a sustainable system while protecting the principles of universal health insurance.

Each and every one of us also has a responsibility to support the system by striving for health management and using medical resources carefully. To deliver the same peace of mind to the next generation, let's think and act together.

"Health is number one for both rabbits and humans! Let's continue to cherish this wonderful system! Hop hop!"