JAPAN: New insurance system for over-75s raises concern over higher premiums, complexity, 'very old' vexed

OSAKA (Daily Yomiuri), April 3, 2008: About 13 million elderly people have been transferred from National Health Insurance and other public schemes to a new system of medical insurance that started Tuesday for people aged 75 and older. But many of the elderly covered by the new scheme are deeply puzzled by some of its aspects, such as how the premiums are set. The new scheme is operated by federations set up in each of the 47 prefectures. Offices of the federations and municipal governments have received numerous inquiries since mid-March about details of the new system. The Tokyo federation, which handles about 1 million insured people, received about 2,800 inquiries between March 17 and March 21, when the new insurance cards were sent out. That figure was more than triple the previous week. Some of the questions were very detailed, such as how to calculate premiums under the new system. Others criticized the official description of the new system as being for the "very old," which some considered insulting. On Tuesday, medical institutions also made inquiries to the Tokyo federation about, for example, how hospitals should ask for payments under the new insurance scheme. All 10 telephones at the federation's general affairs department rang all day. In late 2005, the government decided to establish the new scheme to replace the conventional health insurance scheme for the elderly under which the National Health Insurance fund and money paid by people covered by employees' health insurance financed medical costs for the elderly. The new system aims to clarify the burdens to be borne by the elderly and working generations by making the insurance system for "very old" people an independent scheme and collecting premiums from all elderly people. Though the government believes it gave the public sufficient notice of the new scheme, inquiries flooded in when the system started. One reason is that the amounts of individuals' premium payments, the focus of public attention, have not yet been made public. Letters setting out premium payments will be sent out early this month at the earliest. Though it was possible to calculate the predicted amounts and notify payers, only a small number of local governments managed to do so. In mid-February, the Kobe municipal government notified all of about 150,000 persons insured by the new scheme of their predicted premium amounts. An official of the city government's division in charge of health insurance and pension affairs said, "We believe everyone concerned understands about their premiums." Besides allegations of insufficient public notice, confusion was deepened by the complexity of the system. For example, dependent family members, such as elderly people cared for by children who are salaried workers, are now obliged to pay premiums. But to prevent too drastic a change in their circumstances, their premiums are set to zero for the first six months, meaning no such dependent family members should have had to pay anything when the new scheme started this month. Their premiums also will be reduced by 90 percent for another six months, with premiums typically ranging from 1,700 yen to 2,540 yen in the first fiscal year depending on which prefecture they live in. But many people remain concerned that premiums under the new scheme will be higher than those under National Health Insurance and other public schemes. National Health Insurance premiums vary widely among municipalities as the payments are set by each local authority. But as premiums under the new scheme will be uniform, the amounts paid will inevitably rise for people who live in areas where premiums had previously been low. According to an estimate by the Health, Labor and Welfare Ministry, if a man aged 75 or older receives 2.05 million yen a year in employee's pension and his wife under 74 receives 790,000 yen a year in basic pension, the couple would have paid an average of 108,000 yen a year in National Health Insurance premiums. If the husband is transferred to the new scheme, the couple's total public health insurance premium becomes 109,000 yen. The ministry says the burden of health insurance premiums will be almost unchanged for most people. The new scheme's premiums will generally be deducted from public pension payments, which are made every two months, if the person insured has a pension of at least 180,000 yen a year. If the person was covered by the National Health Insurance until March, he or she will receive notification of their new premiums early this month, with the first premiums to be deducted from public pension payments due on April 15. If the deduction is not made in April, the person will receive notification of their new premiums in June or July. People directly covered by employees' insurance schemes will be notified in June or July, and will have to pay the premium by bank transfer or similar means by September. By Fumihiko Abe, Kenji Uchida and Hiroshi Yumoto / Yomiuri Shimbun Staff © The Yomiuri Shimbun.