Long-term Care Insurance

Long-term care insurance (LTCI) was launched in Japan in 2000 and, as of January 2015, provides benefits to over five million persons 65 years and older, about 17% of this age population.1 Japan’s LTCI is a mandatory program that provides benefits for the long-term care of older persons (as opposed to programs that offer benefits to younger persons with disabilities).

Distinctive characteristics of this program include:

  • The program is public. All persons aged 40 and over contribute by paying a premium that varies according to income.
  • All persons aged 65 and over can access benefits. Persons 40 and over with disabilities related to aging, such as cerebrovascular disease, are also eligible to access benefits. Everyone, regardless of income, has the same benefits. Coverage for those over 65 begins once people turn 65 regardless of need or income.2,3
  • Benefits, which include institutional, home and community-based services, are accessed through a care manager. The results of a standardized questionnaire on activities of daily living and a report from the enrollee’s physician are reviewed by a local committee that determines the beneficiary’s level of need and corresponding quantity of services. Each level of need has its own service ceiling after which individuals and families pay most costs with benefits for low income individuals. Need levels are reassessed every two years or upon request following a change in health.
  • All services are subject to a 10% copayment.
  • Enrollees can choose between care managers as well as service providers. This freedom of choice services as an important way to control quality. This of course is less effective in areas with fewer case managers and service providers.4
  • The program is administered by municipalities, which sets premiums and licenses providers.
  • Providers range from for-profit companies to non-profit companies. Fees for services are established by the federal government and are reviewed once every three years.

Long-term care insurance faces the following policy challenges:

  • Despite great demand for services, human and financial resources as well as government regulations that restrict the building of new facilities leave would-be residents on long waitlists. Residents of the largest and most populated urban areas will face the greatest shortage of care facilities due to the expected increase in older residents.
  • There is a health worker shortage that leaves care facilities, including short-term respite facilities, understaffed.5 The Ministry of Health, Labor and Welfare (MHLW) predicts that there will be a shortage of 300,000 workers by 2025. Low wages contribute to the small number of workers in this sector and the MHLW has proposed various initiatives to address this situation.
  • Attitudes toward labor market expansion to include care workers from other Asian countries are shifting. In 2008 and 2009, Japan signed trade agreements with Indonesia, the Philippines, and Vietnam in order to increase the number of workers from these countries.
  • The LTCI’s effect on carer burden has yet to be extensively evaluated. Factors that may affect carer burden could include service availability, community engagement, and emotional support.


As in the case in several other countries, Japan is expecting to see an increase in the number of persons with dementia. According to government estimates, in 2025, there will be 7 million people with dementia comprising 20% of the 65 and older population. Effective prevention and treatment is still under development making care for persons with dementia a major issue. Under the leadership of Prime Minister Abe, the Comprehensive Strategy for the Promotion of Dementia Measures (also called, “New Orange Plan”) was established in January 2015 signaling a sense of urgency. Another issue that will require attention is “the old caring for the old,” which refers to instances where, for example, an 80 year-old wife is caring for her 85 year-old husband. Leaving the workforce to care for older persons is yet another issue that is expected to grow increasingly serious as the number of persons with dementia increases.


1 Ministry of Health, Labour and Welfare. Long-term care benefits: Monthly report. Retrieved from :http://www.mhlw.go.jp/toukei/saikin/hw/kaigo/kyufu/2015/01.html (accessed on 15 April ,2015).

2 Campbell, J.C., Ikegami, N., Gibson M.J. (2010). Lessons from Public Long-term care insurance in Germany and Japan, Health Affairs, 29(1): 87-95

3 Tamiya, N., Noguchi, H., Nishi, A., Reich, M.R., Ikegami, N., Hashimoto, H., Shibuya, K., Kawachi, I., Campbell, J.C. Population ageing and wellbeing: lessons from Japan’s long-term care insurance poliy. The lancet. 2011. 378(9797): 24–30

4 Ikegami N. Universal Health Coverage for Inclusive and Sustainable Development. Washington, D.C.: World Bank Group, 2014

5 Matsuyama, K. (February 20, 2015). Tokyo’s Elderly Turned Away as Nursing Homes Face Aid Cuts. Bloomberg. Retrieved from: http://www.bloomberg.com/news/articles/2015-02-19/tokyo-s-elderly-turned-away-as-nursing-homes-face-aid-cuts(accessed on 20 August 2015)