Review of High-cost Medical Expense Benefit System: How Will The Public’s Understanding of Increased Burden Be Expanded?

With the aging of the population, the nation’s overall medical expenses continue to balloon. Amid the government’s tight fiscal situation, it is inevitable that patients will be asked to bear a certain amount of the increased burden.

The government has decided to review the government ordinance for the high-cost medical expense benefit system and raise the maximum amount of co-payments for patients. This will be the first revision in 10 years.

This system is designed to lower co-payments for patients when they incur large medical expenses, such as for hospitalization. The maximum monthly co-payment is set according to the patients’ annual income, with financial resources from the medical insurance system covering expenses in excess of that maximum.

For example, if a working-age person with an annual income of ¥3.7 million to ¥7.7 million were to receive cancer treatments that cost ¥2 million per month, the monthly co-payment would be ¥600,000 if the 30% co-payment principle were applied. However, thanks to the high-cost medical expense benefit system, the amount they would actually pay is only about ¥100,000.

As medical care has become more sophisticated, effective new treatments have been developed even for serious illnesses such as cancer and heart disease. At the same time, it is not uncommon for medical expenses to exceed ¥10 million for complicated surgeries and the latest medication treatments.

Total medical expenses, including high-cost medical care, topped ¥40 trillion in fiscal 2013 and have shown an increasing trend ever since. If the current situation is left unchecked, the finances of the medical insurance system will deteriorate and the amount of taxpayer’s money used to cover medical expenses will only increase. Reform is urgently needed.

As a specific reform, the government intends to gradually raise the maximum co-payment limit for all income groups from August this year to August 2027. For those with annual incomes between ¥3.7 million and ¥7.7 million, the maximum co-payment amount will increase by 10% this year.

However, in two years’ time, the maximum co-payment amount will increase further for some people, by 50% or 70% depending on their annual income.

Last year, the Health, Labor and Welfare Ministry’s council was discussing a plan to increase co-payments by 5% to 15% for all income brackets. But at the end of last year, the health minister and the finance minister held discussions and decided to further increase the burden on those with a certain level of income.

It is a principle of taxation and social security to require those with financial strength to bear a heavier burden. Nevertheless, it cannot be said that sufficient discussion has taken place regarding the increase by as much as 70%.

Since co-payment amounts can be revised by amending the government ordinance, the government has no obligation to explain the review at the Diet as it is not a legal revision. However, if the government is going to ask for such a large increase in the burden, it should thoroughly explain the issues related to the system and the necessity of increasing the burden to seek the public’s understanding.

Pension system reform, which takes place every five years, is scheduled to be conducted at the current Diet session. To make the entire social security system of pensions and medical and nursing care services sustainable, a consumption tax increase must also inevitably be discussed.

(From The Yomiuri Shimbun, Jan. 29, 2025)