【Aging, safety net and fiscal crisis in Japan】No.170: Fiscal structure of the Japan Health Insurance Association

In January 2019, the Japan Health Insurance Association released the fiscal outlook for FY 2019 (April 2019-March 2020). The association is an insurer for small-medium company employees (see Column No. 19).

Table 1 shows the financial structure. Of the expected premium income of JPY 9,657 billion in FY 2019, only JPY 6,437 billion is used for medical expenses for insurance subscribers. This is because the association is obliged to contribute funds to help the National Health Insurance and the late-stage elderly medical care system. The fund aid of JPY 1,526 billion from the association to the National Health Insurance will be spent for the medical expenses of people aged 65 to 74 who moved from the association to the National Health Insurance after retiring. The funding of JPY 2,097 billion from the association to the late-stage elderly medical care system is based on the idea that the active working generation should supplement the medical expenses of people aged 75 and older.

The association cannot afford all of the above expenses with premiums. Therefore, the national government subsidizes the association with JPY 1,211 billion of tax money. Judging from such a fiscal structure, the association is not an independent and self-sustaining insurer.

Source: Japan Health Insurance Association