Social Security Reform: Government Must Seek Understanding for Medical Spending Cuts

Editorial

16:23 JST, December 29, 2025

Specific plans have at last been finalized regarding two focal issues in social security system reform. To curb ever-rising medical expenditures, a certain increase in the burden on patients is unavoidable.

The government should provide thorough explanations and seek understanding from patients.

Regarding the high-cost medical care benefit system that limits patients’ out-of-pocket payments when medical costs become high, the copayment amount is envisaged to be raised by 4% to 38% depending on patients’ annual income. This will be implemented in two stages through August 2027.

Patients in the annual income bracket of about ¥6.5 million to ¥7.7 million are set to face the maximum 38% increase in their copayments. The monthly cap, which is currently set at about ¥80,000, is planned to be about ¥110,000 in two years.

On the other hand, the reform plans call for newly setting annual upper limits on out-of-pocket payments to prevent the burden on patients from becoming excessively heavy. The amount of the limit will vary depending on the annual income bracket. For those earning about ¥6.5 million to ¥7.7 million a year, this annual cap will be ¥530,000.

Regarding the relief system for high-cost medical treatment, the previous cabinet worked out plans last year to raise the monthly cap on out-of-pocket payments by up to 73%. However, the plans sparked a backlash from opposition parties and patient groups, arguing it would lead more people to give up on medical treatment. The criticism forced the government to reconsider the plans.

It is evident that the previous cabinet’s failure to make efforts to obtain understanding from patients and other stakeholders caused confusion. The Cabinet of Prime Minister Sanae Takaichi must not repeat the same mistake.

Another reform issue was whether to exclude from public health insurance coverage prescription drugs that have ingredients and effects similar to those of over-the-counter products.

There are about 7,000 prescription medicines similar in nature to OTC drugs. In this reform, for about 1,100 of these medicines, the government has decided to maintain public insurance coverage, which will be applied to 75% of the drug price, and have patients bear 25% of the drug price.

The Japan Innovation Party had demanded that all OTC drug-like items be excluded from public insurance coverage. However, due to opposition from groups such as the Japan Medical Association that are wary of patients avoiding seeing a doctor, the government sought to settle this matter by limiting the exclusion of these items from insurance coverage and working out a system that combines patients’ copayments and insurance coverage.

A sudden change to make all OTC drug-like medicines subject to copayment seems to go too far. Some patients could stop purchasing even essential drugs for their treatment.

It is estimated a review of public insurance coverage for OTC drug-like medicines would reduce the government’s medical spending by ¥90 billion. Reform of the high-cost medical care benefit system is expected to cut insurance premiums, which are part of funds to cover medical expenses, by ¥160 billion.

Nevertheless, considering that the government’s total annual medical expenditures are ¥50 trillion, the saving from these reforms is limited. It is important to identify various items in social security reform and review them continuously.

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