The Reform Of The Public Health Insurance And Economic Growth Of Japan
AbstractThis paper evaluates one of the most drastic reforms of the Japanese public health insurance started in year 2006, by numerically examining the reform in an aging Japan in a dynamic context with overlapping generations within a computable general equilibrium framework. Our simulation results are as follows. First of all, an increase in the co-payment rate, which is one of the most prominent changes in the reform, would result in higher economic growth as well as higher welfare since it stimulates private savings. Secondly, the ex-post moral hazard behavior reduces economic growth. Thirdly, an increasing trend of the future public health insurance benefits can mainly be explained by an aging population, and an increase in the co-payment rate has little effect to reduce the public health insurance benefits in the future. Fourthly, the effect of a decrease in the medical cost, which could possibly be achieved by the improvement in efficiency in the public health insurance, the provision of more preventative medical services, or technological progress in the medical field, on the future burdens is very small. Finally, if the government implements a policy to keep the ratio of the public health insurance benefits to GDP constant, then the government has to keep reducing the public health insurance benefits over time, and the reduction rate should be 45 percent in year 2050. Such a policy also eventuates in lower economic growth until around year 2035. Our simulation results thus indicate that the reform is not so effective to reduce the future public health insurance benefits, but it can achieve higher economic growth and enhance welfare by stimulating private savings.
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Bibliographic InfoPaper provided by Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University in its series Asia Pacific Economic Papers with number 392.
Length: 63 pages
Date of creation: 2011
Date of revision:
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-21 (All new papers)
- NEP-CMP-2011-11-21 (Computational Economics)
- NEP-HEA-2011-11-21 (Health Economics)
- NEP-IAS-2011-11-21 (Insurance Economics)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Crawford School Working Papers in February 2012
by David Stern in Stochastic Trend on 2012-03-02 10:26:00
- Crawford School Working Papers in January 2012
by David Stern in Stochastic Trend on 2012-02-02 18:03:00
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