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The Future Prospect of the Long-term Care Insurance in Japan

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Abstract

This paper explores the impact of population aging on the Japanese public longterm care insurnace (LTCI) within a numerical dynamic general equilibrium model with multiple overlapping generations. The impact of three policy options, such as an increase in co-payments, an earlier starting age of contribution, and more distribution of the cost to the public sector, is also examined. The numerial results show that in the next about forty years the burdens on the first (age 65 and over) and second (age 40 to 64) groups become more than 1.7 times and more than 2.7 times as much, respectively. A relatively more increase in the burdens on the second group cannot be avaiodable, even if adjustment of the cost distribution between both groups is made every three years in the future in accordance with the schedule by the MHLW. Furthermore, in order to reduce future burdens in the LTCI, an increase in co-payments is most preferable, rather than an earlier starting age of contribution in longer duration of contribution with lower burdens every year, or a shift of the cost to the public sector followed by a very higher consumption tax.

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  • Ryuta Ray Kato, 2017. "The Future Prospect of the Long-term Care Insurance in Japan," Working Papers EMS_2017_05, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2017_05
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    Cited by:

    1. Fukuda, Shin-ichi & Okumura, Koki, 2021. "The aging society, savings rates, and regional flow of funds in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    2. Yakita, Akira, 2023. "Elderly long-term care policy and sandwich caregivers’ time allocation between child-rearing and market labor," Japan and the World Economy, Elsevier, vol. 65(C).
    3. Kato, Ryuta Ray, 2022. "Population aging and labor mobility in Japan," Japan and the World Economy, Elsevier, vol. 62(C).
    4. Miyazato, Naomi, 2020. "Intergenerational Inequality and the Contract Out Policy in Public Health Care," Japan and the World Economy, Elsevier, vol. 54(C).
    5. Wang, Qun & Abiiro, Gilbert Abotisem & Yang, Jin & Li, Peng & De Allegri, Manuela, 2021. "Preferences for long-term care insurance in China: Results from a discrete choice experiment," Social Science & Medicine, Elsevier, vol. 281(C).

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    More about this item

    Keywords

    Long-term Care Insurance; Population Aging; Japan; Simulation;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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