Social Security Reform: Discuss Concrete Plans Including Increasing Financial Burdens

Editorial

15:00 JST, October 1, 2025

The birth rate decline shows no sign of stopping, and the number of people supporting the social security system, which includes pensions, medical care and nursing care, continues to decrease.

To make sure the system is sustainable, such reforms as increasing financial burdens are essential. Those aspiring to be the leader of the nation must not shy away from discussions on such matters.

Social security reform is a major issue in the Liberal Democratic Party presidential election, yet no candidate has gone so far as to suggest concrete proposals.

Both former economic security minister Takayuki Kobayashi and former LDP Secretary General Toshimitsu Motegi argue that the burden on the working generation must be reduced and call for those with the capacity to support the system, including elderly people, to do so.

Social security benefit expenditures, which stood at ¥78 trillion in fiscal 2000, are projected to balloon to ¥140 trillion in fiscal 2025.

At the same time, social insurance premiums have increased. According to an Internal Affairs and Communications Ministry survey, for households with two or more members, annual income earned by the working generation from their employers rose from ¥6.33 million to ¥6.97 million during this period. In contrast, their annual social insurance premiums increased from ¥580,000 to ¥830,000.

The increased burden of tax and social insurance premiums, including two consumption tax hikes implemented during this period, are likely a factor behind young people hesitating to marry or have children.

However, if the sources of funding for benefits are reduced excessively, it would make it difficult to maintain the social security system. To secure stable funding while reducing the burden on the working generation, a consumption tax hike — a tax borne by a broad range of generations — may be unavoidable.

The immediate challenge is revising the high-cost medical expense system, which is designed to limit the burden on patients when their medical payments become large. Although the government attempted to raise the upper limit on patients’ out-of-pocket payments, it faced criticism and postponed a decision until this autumn.

Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi has adopted a cautious stance on raising the limit.

The government plans to secure ¥3.6 trillion a year for measures to address the low birth rate through such measures as cuts in social security spending. If the reform of the high-cost medical expense system is postponed, the government should present a comprehensive plan showing how the funding for the declining birth rate measures will be secured.

To reduce medical costs, a proposal is being considered to remove drugs whose ingredients are similar to those of over-the-counter products such as pain-relief patches and ointments from coverage under the public health insurance program. Careful discussion is needed to ensure the burden on patients does not increase excessively.

The LDP and junior coalition partner Komeito accepted the Japan Innovation Party’s demand for free high school tuition during this year’s ordinary Diet session, without considering the issue of fiscal resources, in order to obtain the party’s cooperation.

It should be recognized that such political maneuvering is another factor putting strain on government finances.

(From The Yomiuri Shimbun, Oct. 1, 2025)