Contributions to support payment of medical care costs for the elderly, and specific premiums
When you join a health insurance plan, you must pay health insurance premiums. While the amount of health insurance premiums is calculated based on your income (total compensation including salary and bonuses), the methods used to calculate these premiums differ for monthly salaries and bonuses.
Contributions related to the Medical Care Service System for the Aged
Health insurance societies make significant contributions to fund benefits for persons in the earlier stage of old age, support payments for the advanced elderly, and the Medical Care System for Retired Persons. As society grows older, the types and amounts of these contributions are increasing. They now represent a major factor in the declining financial status of health insurance societies.
In April 2008, the Health and Medical Service System for the Aged and the Medical Care System for Retired Persons were abolished, and the Medical Care System for the Advanced Elderly and the Medical Care System for Persons in the Earlier Stage of Old Age were established. However, the burden on health insurance societies remains heavy. For example, the Medical Care System for Retired Persons remained in place for a transitional period, while societies have been forced to make new contributions to fund aid/benefits for the advanced elderly and for persons in the earlier stage of old age.
1. Contributions to the Medical Care System for the Advanced Elderly
This is a medical care system for persons aged 75 or older (65 or older for the bedridden or for others similarly afflicted). The system is funded by insurance premiums paid by persons aged 75 or older (10% of its funding), contributions from currently active workers (National Health Insurance, employees’ insurance: 40%), and public funding (50%). Contributions from health insurance societies account for 40% of this funding.
2. Contributions to the medical care system for persons in the earlier stage of old age
This is a system intended to make adjustments for medical care costs among National Health Insurance and employee insurance plans for persons aged 65–74. Health insurance societies (employee insurance) pay funding adjustments in amounts calculated based on the differences in the proportions of their membership who qualify as persons in the earlier stage of old age, to aid in the funding of National Health Insurance, which has a high number of members aged 65–74.
3. Contributions to benefits for retired persons
While the Medical Care System for Retired Persons was abolished with the creation of the new Medical Care Service System for the Aged, it remains in place for retirees through fiscal 2014 as a transitional measure. Health insurance societies and other insurers continue to make contributions (contribution for retirement) to help fund this system.
Together with the Medical Care Service System for the Aged created in April 2008, general insurance premiums for health insurance have been split into base premiums and specific premiums. Specific premiums are used to fund the costs societies pay to support medical care for the elderly—for example, in the form of contributions to fund benefits for persons in the earlier stage of old age and support payments for the advanced elderly. Separating these from base premiums clarifies the support being provided to the elderly and other beneficiaries.
- Base premiums: Insurance premiums used to fund medical benefits, health activities, etc.
- Specific premiums: Insurance premiums used to fund the cost of supporting medical care for the elderly and others