On Sunday, Japan’s Yomiuri Shimbun reported that the Japanese Ministry of Health, Labor and Welfare is looking to expand the bracket of those aged 70 or older who pay 30 percent of their medical fees out-of-pocket to fully encompass anyone whose income is on par with the working generation. The plan is to be implemented by 2028 and seeks to address the younger generation’s economic burden in light of inflated medical costs, and the exacerbation of low birthrates and an aging population.
The current system has those aged 70 to 74 pay 20 percent of medical fees out-of-pocket, with higher earners paying the same 30 percent rate as workers. Those aged 75 or older pay only 10 percent, or 20 to 30 percent for higher earners. The ministry said that the bracket for higher earners should be expanded to more accurately encompass those individuals who can afford it and have comparable incomes to the working-age population — and that more people paying the 30 percent rate is necessary for the sustainability of the system.
It is a common issue for mature welfare states — an aging population, longer life expectancies and advancements in medical technology amount to a cost burden that, if placed on the younger generation, would mean system collapse. Healthcare spending has already exceeded 11 percent of Japan’s GDP, and the proportion of elderly people with sufficient income and assets to pay their way is on the rise. For them to continue to enjoy healthcare subsidies to the current extent would undermine the system’s fairness and integrity.
The principle of the most able shouldering more of the burden is one of social equity. For Japan’s tax-exempt co-payment model to maintain sustainability without increasing taxes, there is an emerging consensus that elderly people cannot be let wholly off the hook and that high earners must contribute more.
In Taiwan, 1995 saw the rollout of the National Health Insurance (NHI) system — 30 years later, user fees are virtually nonexistent. The public enjoys advanced medical technology at extremely low cost, and any adjustments to payment thresholds suggested by the NHI Administration have been met with resistance. The system has lost fiscal vigilance and its risk-spreading functions.
During my tenure as director-general of the NHI Administration, I advocated for co-payment system reforms so that those who receive high-cost medical treatments pay reasonable fees to ensure that the most disadvantaged people can get the care they need, a shift supported by then-premier Su Tseng-chang (蘇貞昌).
While the NHI global budget payment system provides control over expenditure, it has also created issues with competition between medical centers and excessive clinic visits for the healthcare system. Not enforcing reasonable co-payments would mean waste becoming a systemic issue. Japan’s reforms are well worth Taiwan’s consideration: Real societal justice means that those who can must pay a little more so that people in need do not have to forgo medical treatment due to the cost. Co-payments are not designed to punish or cut welfare, but to ensure responsible use and the sustainability of the system.
Taiwan has long been trapped by the misconception that reform is an attack on livelihoods. In reality, user payments could protect the longevity of the NHI and ensure generational justice. Japan dares to address the sensitive question of generational burdens because it understands that if today’s payments are not adjusted, future young generations would be unable to bear the load.
NHI reform is not just a technical question, but one of values. On this, Japan is choosing the path of fairness and sustainability. Only when society is willing to accept reasonable co-payments as a form of social responsibility would the NHI system win back trust and be able to continue safeguarding the health of each and every citizen.
There are three ways in which Taiwan could make a start: First is to establish a tiered co-payment structure based on income, with an upper cap and protections for serious diseases and low-income groups. Second, adopt differential pricing for high-cost medical imaging services, consumables and new medicines, and introduce assessments of necessity and value to guard against overuse. Third, establish exemptions for rare diseases or serious illnesses, and ensure that people are informed and supported. Reforms should be empathetic, targeted and precise.
Reforms must be bold and well-communicated, backed by data and sound principles. The goal is clear: Those who have the means should shoulder more of the burden and those in need must not be forgotten.
This way, in another 30 years’ time, the NHI as a public institution could live on as a source of genuine national pride.
Lee Po-chang is a chair professor at Taipei Medical University’s College of Public Health and former director-general of the NHI Administration.
Translated by Gilda Knox Streader
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