COVER STORY • Exploring for the Best Models of an Aging Society – Lessons from Japanese Experience • 8

Japan’s Long-Term Care Insurance
System & Community-Based
Integrated Care System

By the Health and Welfare Bureau for the Elderly, Ministry of Health, Labour and Welfare

Introduction
With Japan’s population aging more rapidly than that of any othernation in the world, the Long-Term Care Insurance System wasestablished in 2000 as a framework for all of society to support longterm care for older persons. This article introduces the current stateof this framework, focusing on the history of its introduction, an
overview of the system, and the Community-Based Integrated Care
System.

Background to the Introduction of the Long-TermCare Insurance System
The percentage of Japan’s population aged 65 or higher is 28.1%(as of 2018), making Japan the country with the world’s oldest
population. The percentage of people aged 65 and higher has been
rising steadily, from 5.7% in 1960 to 7.1% in 1970, to 9.1% in 1980,
to 12.0% in 1990, and to 17.3% in 2000.
Along with this rapid aging and increased longevity, the number ofpeople who are elderly and bedridden, or require assistance in their
daily lives, is growing. Traditionally, these people were mostly cared
for by their families, but in addition to the increased need for nursing
care, changes in the social and industrial structure have brought
about a shift from extended families to nuclear families, leading to asituation in which the problem of long-term care places a majorburden on families.
In Japan, a system of welfare for older persons using tax
resources has been in place since 1963, but with a shortage offacilities relative to overall needs, persons with low incomes andother special circumstances were given priority. In addition,
procedures like means tests meant that the system was notnecessarily easy for ordinary people to use.
In addition, in 1973 medical expenses for older persons weremade free, and a social problem of “social hospitalization” emergedin which older persons requiring nursing care were hospitalized forextensive stays despite the fact that they had little need for medical
care.
With these social changes, the limits of the traditional systembecame evident, and the Long-Term Care Insurance System wasintroduced as a new framework in which all of society supported thelong-term care of older persons.

34 Japan SPOTLIGHT • July / August 2019

Basic Concept of the Long-Term Care Insurance
SystemJapan’s Long-Term Care Insurance System is based on three mainconcepts.
The first is “support for independence” and this is the mostimportant principle. Long-term care in Japan means more than justdaily assistance with things like making meals, using the lavatory,
and bathing. The basic principle is that support for persons requiringlong-term care maintains the person’s dignity, and allows them tolive their daily lives as independently as possible in accordance with
their capabilities.
The second concept is that the system is “user-oriented”. Under
the old welfare system for older persons, the government conductedmeans tests and other procedures and then unilaterally determined
what service would be provided. Under the Long-Term Care
Insurance System, however, the necessity for long-term care basedon objective, impartial standards in accordance with each individual’s
nursing care needs is deemed a right, and appropriate services arechosen based on the user’s selection.
The third concept is that a “social insurance system” is employed.
The system is supported by all persons aged 40 and older, including
older generations. The person pays insurance premiums in advanceand receives services when they are needed, giving the system theunique feature of a clear relationships between benefits andcontributions.

Framework of the Long-Term Care Insurance
SystemThe basic framework of the Long-Term Care Insurance System isshown in Chart 1.
Municipalities (cities, towns, and villages) are the long-term careinsurers in Japan. There are more than 1,700 municipalities in Japan,
and each is the operator of its local long-term care insurance. The
system is managed flexibly by municipalities, which are closest to
the people, based on actual local circumstances.
Half of the system’s financial resources come from taxes, and theother half from insurance premiums. The breakdown of taxes is 25%
from the national government and 12.5% each from the prefecture
and the municipality.
Insurance premiums are paid by insured people. People arehttps://www.jef.or.jp/journal/

COVER STORY 8
CHART 1

Structure of the long-term care insurance system
Municipalities (Insurer)
Tax

50%

Premiums

50%

Municipalities

Prefectures

State

12.5%

12.5%(*)

25%(*)

23%

Pay 90% of thecosts (*)

27%

Application

Service providers○ In-home services- Home-visit care
- Outpatient Day Long-Term Care, etc.
○ Community-based services- Home-Visits at Night for Long-Term
Care- Communal Daily Long-Term Care for
Dementia Patients, etc.
○ Facility Services- Welfare facilities for the elderly- Health facilities for the elderly, etc.

Determined based on
the population ratio(FY2018-2020)

Premiums

Individualmunicipality

National pool ofmoney

Users pay 10% (*) of
long-term care services inprinciple, but must pay theactual costs for residence
and meals additionally.

Use of the services

National Health Insurance, Health
Insurance Society, etc.

Certification of NeededLong-Term Care

Insured persons

Primary Insured Persons- aged 65 or overSecondary Insured Persons- aged 40-64(34.40 million people)(42.00 million people)

Note: The figure for Primary Insured Persons is from the Report on Long-Term Care Insurance Operation (2016), Ministry of Health, Labour and Welfare and that for Secondary Insured
Persons is the monthly average for FY2016, calculated from medical insurers’ reports used by the Social Insurance Medical Fee Payment Fund in order to determine the amount oflong-term care expenses.
(*) Co-payment rate for persons with higher income than certain amount is 20% or 30%.

Source: Ministry of Health, Labour and Welfare

considered insured from the age of 40, and enrollment in the system
is mandatory rather than voluntary.
There are two categories of insured persons – Category 1 Insured
Persons (Primary Insured Persons – aged 65 or over) and Category
2 Insured Persons (Secondary Insured Persons – aged 40-64).
Category 1 Insured Persons are residents aged 65 or older.
Insurance premiums are determined by the municipality based on
the level of income, and are deducted off the top from pension
payments. Category 2 Insured Persons are residents between theages of 40 and 64. These persons do not pay premiums directly tothe municipality, but instead are charged premiums along with the
medical insurance premiums paid by all persons enrolled in theirrespective type of medical insurance.
Insured persons are able to use services according to the nursing
care they are deemed to require based on objective national
standards certified by the municipality (insurer). There are sevenlevels of required nursing care certifications: care levels 1 to 5, andsupport levels 1 to 2. Classifications are made according to carerequirements, and the type and amount of services to be received aredetermined according to the level. The two categories of insured
persons also differ in terms of benefit requirements. For Category 1

Insured Persons, certification is given if the person requires nursing
care in their daily life, regardless of the reason. For Category 2
Insured Persons, certification is given if nursing care is required
because of illnesses caused by aging like dementia or
cerebrovascular disease.
Insured persons who are certified to receive long-term carechoose the service provider and conclude a contract for the use of
the service. Long-term care service providers are primarily privatesector entities. Both nonprofit and for-profit corporations are able toenter the field, and services are provided by a diverse range ofentities. Since the launch of the Long-Term Care Insurance System,
the market for long-term care services has grown significantly.
When using services, in principle the user pays 10% of the costthemselves to the service provider, but if the user’s income is above
a certain level they are required to pay 20% or 30% themselves. The
remaining 90% (or 80% or 70%) is paid from the insurer directly tothe service provider.
Japan’s long-term care insurance covers both care provided in theusers home and at facilities. Many older persons want to live athome where they are comfortable with their surroundings, evenwhen they require long-term care. Services can be combined in a
Japan SPOTLIGHT • July / August 201935

COVER STORY 8

variety of ways. The user may have their home modified and receive
care from visiting caregivers, nurses, and rehabilitation specialists,or they may go to the provider’s facility to receive care. There areolder persons who move to group homes having persons withdementia living together or nursing homes.
Japan has the specialist occupation of care manager, which entails
putting together appropriate care plans in line with the user’s needs,
and coordinating among the various related parties.

CHART 2

Changes in the population over age 75
3,000(10,000 people)

2,500
2,180

2,000

1,872

Changes & Issues in the External Situation
Roughly 20 years have passed since the Long-Term Care
Insurance System was introduced. While the system has stabilized
and developed on the one hand, issues are also appearing for the
future.
Japan’s population has been aging since the system wasestablished in 2000. The number of persons aged 65 and older has
grown 1.6 times, from 21.65 million in 2000 to 34.92 million in
2018. At the same time, the number of service users has grown from1.49 million in 2000 to 4.74 million in 2018, an increase of 3.2 times,
showing that the number of users is growing at a faster rate than the
aging of the population. The introduction of long-term care services
has led to a wide spread in the number of people who require care
and are using services as latent needs materialize, so it can be said
that the people of Japan have embraced the system. Of particularnote, while the number of users of facility services has grown 1.8
times, the number of users of home-care services has shown asignificant increase of 3.8 times.
Naturally, as the population ages and the number of users
increases, the total cost of long-term care insurance is proportionally
increasing each year. From ¥3.6 trillion in fiscal 2000, costs havegrown to ¥11.1 trillion in fiscal 2018 (budget basis). In addition,
along with the growth in total costs, the amount of insurance
premiums paid by each individual is also increasing. The amount of
insurance premiums is recalculated every three years, and taking as
an example the monthly premium paid by a Category 1 insured
person aged 65 or over, the nationwide average during the first
period (fiscal 2000-2002) was ¥2,911, and by the current seventh
period (fiscal 2018-2020) this had roughly doubled to ¥5,869.
Furthermore, looking at population trends, demand for long-termcare is expected to grow for some time. Looking ahead to 2025, a
sharp increase in the number of persons aged 75 and higher isforecast (Chart 2). This is because in Japan by 2025, the large baby
boomer generation born between 1947 and 1949 will all havereached the age of 75. Beyond that, the rapid growth in the
population aged 75 and above will dissipate, but the number ofpeople aged 85 and over will continue to grow. The percentage of
people who require long-term care increases proportionally with age.
Looking at the percentage of people certified to receive long-termcare by age group, the percentage for people aged 65-69 is 2.9%,
but this increases to 13.2% for persons aged 75-79 and to 50.7% for
persons aged 85-89. Therefore, an increase in the number of older
persons aged 75 and above, and 85 and higher, will lead to an
36 Japan SPOTLIGHT • July / August 2019

720

1,632

1,164

383

831

620

1,419

1,500

2,288 2,260 2,239 2,277

224

678

0

870

1,037

1,002

1,024

964 1,029

970

1,152

494

1,000 901 294

500

Age 85 &older

2,417 2,446 2,387

1,138

1,252

1,460

Age 75-84
1,458

1,258

1,216

1,307

1,453

1,418

1,235

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

Sources: Future population estimates were taken from the National Institute of Population andSocial Security Research’s “Population Projections for Japan (April 2017): MediumFertility (Medium-Mortality) Assumption”
Actual past figures were taken from the Population Census by the Statistics Bureau of
the Ministry of Internal Affairs and Communications (population with proportionalcorrections for those of unknown nationality/age)increase in the number of people who require long-term care.
At the same time, the number of people aged 40 and over paying
Long-Term Care Insurance premiums is expected to peak in 2021
and then decline. In addition, the number of working-age people, i.e.
those who provide nursing care, will also decline. If the Long-TermCare Insurance System is to operate continuously in the future, wewill need to make serious efforts to create a better system while
conducting regular reviews.

Structure of the Community-Based Integrated
Care System
Given these changing circumstances and looking ahead to 2025,
the most pressing issue now is the creation of a Community-Based
Integrated Care System.
The trend in the number of older persons outlined above shows
the figures on a nationwide basis, but in fact the situation differs
significantly by region. Many urban areas have baby boomer
residents, and face the issue of a rapid increase in the number ofpeople aged 75 and higher. In rural areas, there are regions where
the overall population is contracting and the number of older
persons is decreasing as well. It will therefore be more important
than ever to implement measures that are consistent with the actual
situation in each area.
The Community-Based Integrated Care System is based on theprinciple that even if someone requires intensive long-term care,they should be able to live out their lives as they are used to living
where they are used to living. To achieve this, the system aims toCOVER STORY 8

provide comprehensive support with five components – health(medical) care, nursing care, preventive care, residential care, andsupport for daily living (Chart 3). Municipalities are working to put
this system in place by establishing community general support
centers for each sphere of daily life, and handling consultations fromresidents and coordinating with related parties.
Next, we will introduce some of the key points for building a
Community-Based Integrated Care System.

forums to report on sample cases and how to allocate roles properly
among related professions, and creating face-to-face relationships.

Community Building
A system of medical and nursing care and the roles of specialists
are in and of themselves insufficient for building a Community-Based
Integrated Care System. Community building that includes local
residents is also an important component.
Preventive care can also be seen as one form of community
building. Currently, communities encourage resident-led initiatives
that create places for older persons to go to engage in activities like
physical exercise. There are no rules for where or how these events
are held. For example, they might provide an opportunity for people
within close walking distance to gather once a week to engage inlight calisthenics for 30 to 60 minutes and then relax over tea.
Participating in the calisthenics has the aspect of building health,while the act of gathering together has the benefit of building ties
among local residents.
Sometimes, activities can come about from local residents using
local resources to provide mutual assistance to support one anotherin their daily lives. As the number of households with an older
person living alone and with an old couple increases, there are areas
where these people require a minimum of support for things likedaily mobility, shopping, sorting and taking out the trash, andchanging light bulbs. Many of these tasks do not necessarily need tobe carried out by specialist long-term care providers, and can behandled by local volunteers. Initiatives with local characteristics are
beginning to appear in various areas, including the assignment of
coordinators for daily support who connect local resources, or giving
volunteers points that can be accumulated and exchanged for goods

Coordination Between Medical Care
& Nursing Care
One of the important points in the building of a Community-Based
Integrated Care System is to have appropriate coordination between
medical care and nursing care.
Many older persons live with multiple illnesses, and also require
one-time hospitalization when they become ill or are injured.
Enabling older persons who require both medical care and nursing
care to continue to live in the area where they are used to living, andto be able to make a smooth return to home after recovering if they
are hospitalized for medical treatment, requires a system in which
various medical and nursing care staff in the area, including doctors,
nurses, care managers, care workers, rehabilitation specialists, andpharmacists, can coordinate their work.
Under the 2014 revision to the Long-Term Care Insurance Act, thesystem is intended to promote coordination between medical careand nursing care. To build that system, municipalities identify theirlocal resources and seek to promote cooperation among various
professions. Specific initiatives vary depending on the area, but
successful examples include training sessions for persons fromvarious professions held jointly with local medical associations,
CHART 3

The Community-Based Integrated Care System
In case of illness:

Health Care

the Community-Based Integrated Care System Model

Nursing Care

Hospitals:
Acute phase, recovery phase,
chronic phase• Community General
Support Center• Care manager

When care becomes
necessary...

Outpatient / in-patient
care

Regular health care:• PCP, clinics with in-patient facilities• Regional affiliate hospitals• Dental care, pharmacies

Handles consultation andservice coordination.

Visits / Moving in• In-home services:■ Facility/Residence services:Home• One’s own residence• Senior residences offering services, etc.

■ Preventive Long-Term Care Services

Livelihood support/ preventing long-term care
So that seniors can continue active, healthy living* The Community-Based Integrated Care System isconceived in units of every-day living areas(specifically equivalent to district divisions forjunior high-schools) in which necessary services
can be provided within approximately 30 minutes.

Senior clubs, residents’ associations, volunteer groups, NPOs, etc.
Source: Ministry of Health, Labour and Welfare

Japan SPOTLIGHT • July / August 201937

COVER STORY 8

or cash.

CHART 4

Policies to Address Dementia
Building communities that are compatible for persons withdementia is also indispensable for creating a Community-Based
Integrated Care System. The number of older persons in Japan withdementia was 4.62 million as of 2012, and estimates are that this willreach 7.00 million by 2025. Seven million people correspond to one
in five people aged 65 and over. Social costs related to dementia
were roughly ¥14.5 trillion in 2014, and are estimated to reachapproximately ¥19.4 trillion by 2025. Dementia can be seen as
having a significant impact on overall daily life. Many fields inaddition to medicine and nursing care are involved, in areas likemoney management, prevention of becoming a victim to fraud, andresponses to getting lost, and therefore this issue needs to beaddressed by the entire government, not only the Ministry of Health,Labour and Welfare.
In 2015, 12 Japanese government ministries and agencies jointly
formulated a comprehensive national strategy to address dementia,
called the New Orange Plan. The New Orange Plan has seven pillars:(1) Raising awareness and promoting understanding of dementia;(2) Providing health care and long-term care services in a timely andappropriate manner as the stages of dementia progress; (3)Strengthening the measures for early onset dementia; (4) Supporting
those looking after people with dementia; (5) Creating age anddementia-friendly communities; (6) Promoting research anddevelopment and disseminating the results of prevention, diagnosis,
cure, rehabilitation models, and care models for dementia; and (7)Prioritizing the standpoint of persons with dementia and theirfamilies.
The training of dementia supporters is one example of a specificmeasure in this area. Dementia supporters possess accurate
knowledge and understand dementia, and assist persons withdementia and their families to the extent possible in the community
and the workplace. Anyone from children to adults can take thecourse to become a dementia supporter, and more than 10 million
supporters have already been trained.
New policies to address dementia are currently being studied, tomake government measures even stronger and more coordinated.
We expect this new policy to expand measures to reduce the risks
and delay the onset of dementia, while continuing to build dementiafriendly communities.

Looking Ahead to 2040
Finally, we would like to present a simple medium-term outlook
extending to roughly 2040. As noted previously, the period to 2025
will see a push to achieve a Community-Based Integrated Care
System against the backdrop of a rapid increase in the number ofolder persons. Looking beyond 2025, more than a rapid increase in
the number of older persons, the bigger issue will be to address the
rapid decrease in the working age population. The number of
38 Japan SPOTLIGHT • July / August 2019

Changes in the number or employees(10,000)

65.8 million

About 63.5 million

6,000

About 56.5 million

2,000

1,000
Medicaltreatment/
welfare0

8.23 million<12.5%>

About 9.3
million<About 15%>
[Temporary]

About 10.60
million<About 19%>
[Temporary]

2018

2025

2040

We mechanically calculate based on the sources: government's economic growth forecast by Cabinet
Office "Economic Outlook and Basic Attitudes toward the Economic and Fiscal Management" in 2018,
and in and after 2025, labor force participation rates by age and sex in the Japan Institute for Labour
Policy and Training “Estimates of Labor Supply and Demand in 2015” and National Institute ofPopulation and Social Security Research “Future Estimated Population of Japan (Estimated in 2017)”(according to Medium-Fertility and Medium-Mortality Assumption)

Source: Ministry of Health, Labour and Welfare

employed persons is seen decreasing from 65.80 million in 2018 to63.50 million in 2025, and to 56.50 million in 2040. At the sametime, the number of required workers in the area of medical care andsocial welfare, including long-term care, is expected to increase from
8.23 million in 2018 to 9.30 million in 2025, and to 10.60 million in
2040. Estimates are that by 2040, roughly 19% of the workforce will
be engaged in the fields of medical care and social welfare (Chart 4).
Based on these projections, we believe the social security sector
as a whole will need to both secure labor and raise service
productivity. With regard to securing labor, it will be important topromote diverse forms of employment and social participation,
including for older persons, and maintain the vitality of society as awhole. A goal has been set to increase healthy lifespans by three
years or more by 2040, and this will include stepped-up efforts inpreventive care. In terms of service productivity, the use oftechnologies like robotics, artificial intelligence, and information andcommunications technologies can be seen as reducing the burden
placed on workers and increasing productivity. In the long-term caresector, in addition to support by introducing nursing care robots likemonitoring sensors, we are seeing the formulation of guidelines toincrease productivity through specific operational improvements likestreamlining operational processes and the use of information andcommunications technology.
Because Japan is facing issues associated with an aging
population before the rest of the world, it has tried various responses
including the establishment of a Long-Term Care Insurance System.
Looking ahead, the populations of other countries, especially in Asia,
are set to age more rapidly that Japan’s, so we hope that this article
will be useful to those countries.