Efforts to Reduce Burden on Working Generation Still Limited

Tokyo, Dec. 26 (Jiji Press)–While the Japanese government’s fiscal 2026 budget bill, adopted on Friday, calls for record-high spending on social security, its efforts to reduce the health insurance premium burden on the working generation are still limited. The budget bill allocates a record 39.06 trillion yen for social security-related expenses, up 760 billion yen from fiscal 2025, reflecting a rise in medical and nursing care costs due to an aging population, as well as a sharp rise in medical fees under the public health insurance system. For fiscal 2026, the government plans to lower drug fees by 0.87 pct but raise medical service fees by 3.09 pct, the first increase above 3 pct in 30 years. The medical fee hike was decided on under Prime Minister Sanae Takaichi’s initiative at a time when many medical institutions are struggling with inflation and pressure for higher wages. Meanwhile, the estimated reduction in the health insurance premium burden over the three years from fiscal 2026 is limited to 460 billion yen. The Japan Innovation Party (Nippon Ishin no Kai), part of the ruling bloc, had sought to end public insurance coverage for prescribed medicines with ingredients and effects similar to those of over-the-counter drugs, with the aim of slashing annual medical spending by several hundred billion yen. However, the party abandoned this, considering a resulting rise in the burden on patients. Instead, the government decided to impose additional charges for these drugs starting in March 2027, which is expected to reduce annual medical spending by about 90 billion yen. Amid calls from patients, the government also narrowed a planned hike in the cap on out-of-pocket medical expenses and postponed a conclusion on the issue of expanding the scope of people aged 65 and over who are subject to a higher out-of-pocket payment rate for nursing care services. The Takaichi administration now plans to review the out-of-pocket medical payment rate for people aged 70 and over, a move likely to provoke a backlash from elderly people. END [Copyright The Jiji Press, Ltd.]