A2.2 The Retired and Elderly
Those covered by occupation-based insurance while working are included in the NHI scheme from when they retire until they become “elderly” (over 75). The benefits for such retirees are financed by premiums paid by the retirees themselves, funds from central government and local governments, and the transfer of contributions from the retirees’ former occupation-based programs.
Until fiscal 2007, benefits for the elderly were provided by plans operated by each municipality. Benefit payers (the municipalities) to medical service providers (hospitals, clinics, etc.) were separate from the insurers. Benefits were financed by payments from whichever of the programs an individual was in when younger, and funds from central government and local governments. In addition, the elderly paid premiums to the insurers with which they were enrolled.
Because most of the elderly were retirees, they were in the NHI Plan. Hence, some insurers within the NHI, especially those in rural areas where the elderly made up a relatively large percentage of the insurers’ enrollees, were forced to levy higher premiums. This disparity among insurers became wider with the aging of the population.
In order to address this issue, in fiscal 2008, the Medical Insurance System for the Elderly was introduced as an independent social insurance system for those aged 75 and over. In this system, earnings-related premiums are levied on the insured. In order to enroll, a participant has to withdraw from the NHI or any employee health insurance plan. Extended association with the Medical Insurance System for the Elderly is organized by municipalities and prefectures, which act as insurers (levying premiums) and benefit payers.
Insured persons in this system pay 10% of the cost of medical treatment as a copayment. The remaining 90 % is divided into three parts: 50 % is paid by the government (financed by taxes or debt issuance), 40 % by the health insurance program the individual was in when younger, and 10 % by premiums paid by plan participants.
One of the aims of introducing the system is to shrink the geographic disparity in National Health Insurance premiums. The scheme is also intended to alleviate the financial burden that medical care can place on the elderly.