Japan’s Long-Term Care Cost Projections: Comparison with the European Commission Ageing Report

Japan’s long-term care costs are increasing at a higher rate than other social security-related costs. Therefore, it is important to examine the exacerbating and constraining factors on future long-term care costs using various scenario hypotheses. This study establishes four scenarios based on the European Commission’s Ageing Report (2015)―the base case, high life expectancy, constant disability, and shift to formal care scenarios―to project Japan’s long-term care costs until 2060 and also examines the factors affecting future long-term care costs. Moreover, the projection results for Japan and various EU countries for the four selected scenarios are compared in order to examine the particular characteristics of Japan’s long-term care costs. The projection results show that Japan’s long-term care costs for the period 2013-2060 rise significantly in each scenario, while individual comparisons show that both the high life expectancy and shift to formal care scenarios rise further than in the base case scenario, while long-term costs decrease in the constant disability scenario. Furthermore, the comparison of the projection results for Japan and the EU countries by scenario show that Japan, which is significantly affected by aging, has a greater scale of increase in the high life expectancy scenario and a greater scale of constraint in the constant disability scenario.