【Aging, safety net and fiscal crisis in Japan】No.13: Living Protection System and Medical Care

In this column series, Yukihiro Matsuyama, Research Director at CIGS introduces the latest information about aging, safety net and fiscal crisis in Japan with data of international comparison.

The living protection system plays a major role as a safety net in the social security system to ensure the minimum health and cultural life of the people. As shown in Figure 1, the number of people receiving living welfare benefits increased significantly from 882,000 in 1995 to 2,145,000 in 2016. The protection ratio (the percentage of people receiving these benefits to the total population) also increased from 0.70% in 1995 to 1.69% in 2016.

Table 1 shows the amount of living welfare expenses in 2015 paid by the government. Medical expenses account for 48.1% of the total amount of 3,698 billion yen ($33.6 billion US). Critics point out that the medical care living protection beneficiaries receive exceeds the medical treatment of its taxpayer. This is influenced by misrepresentations from doctors who are responsible for reviewing the clinical details described in reports. Because the government pays the medical expenses of these beneficiaries, doctors may abuse the system by, for instance, "overlooking" previous excessive medical treatment for a welfare protection beneficiary. Some beneficiaries receive prescription medicines in large quantities from medical institutions and sell them.

As the disparity continues to widen, the importance of the living protection system as a safety net will increase. However, as the shortage of financial resources becomes more acute, it will become difficult to maintain the system with the current faults left unattended.

Figure 1: Number of living protection beneficiaries and protection ratio


Source: Ministry of Health, Labor, and Welfare

Table 1: Breakdown of living protection expenses (2015)


Source: Ministry of Health, Labor, and Welfare

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