6. Structural Reform of the Social Security Programs for an Aged Society With Fewer Children: 1990-present

6. Structural Reform of the Social Security Programs for an Aged Society With Fewer Children: 1990-present

(1) Overall Situation

: Progress of the Fewer Children and an Aging Population

The rate of progress of fewer children and an aging population in Japan is at a speed unprecedented in other nations. The population age 65 and older in 1995 was 14.8%; it is predicted that it will be at the highest level of anywhere in the world in 2010, 15 years later. At the same time, the total fertility rate (which indicates the number of children borne to a woman throughout her lifetime) had fallen to 1.43 in 1995. The form of the family is undergoing a transformation, with women's participation in society and the scaling down of the family. In the midst of this transformation, the role which social security must play is expected to grow to include support for long-term care needs and child care.

: Transforming Economic Conditions

In recent years, the growth of the economy in Japan has been transforming into a slow-growth one, and at the same time, a structural reform is called for to cope with the "hollowing out" of industry and globalization of the economy among other issues.

In addition, in the future, the labor force is expected to shrink. As may be observed with the large amount of government bonds which have been issued to make up for the deficit, both nationally and locally, Japan's finances are in a grave situation. Amidst such a state, concerns are beginning to emerge that the burden of whatever scale the future of social security takes may likely become a limiting factor in maintaining an energetic society and economy.

(2) Integrated Development of Health, Medical Care and Welfare

: Formulating and Promoting the Three Plans for Health and Welfare

To deal with the growing and diversifying needs for social security, it is necessary to enhance services in the welfare area, achieve the inter-cooperation of health, medical care and welfare, and develop integrated measures with a medium- to long-term perspective. For this, the Golden Plan, the Angel Plan and the Plan for People With Disabilities were formulated, and health and welfare measures are being promoted both systematically and in an integrated fashion.

a.	Golden Plan and New Golden Plan
	In 1989, the Ten-Year Strategy to Promote Health Care and Welfare for the Elderly (the Golden Plan) was established. This plan was made for establishing a long-term care service system to allow elderly people requiring long-term care to be independent as much as possible and continue to live in their accustomed homes and communities. It was decided to enhance in-home and institutional welfare services as well as to prevent bedridden elderly under this plan. In 1990, welfare service administration was shifted to municipalities, and the establishment of the Local Health and Welfare Plan for the Elderly became mandatory. Later, in 1994, in order to meet the expanded needs after the Golden Plan implementation, the New Golden Plan was established, under which the foundation of elderly long-term care services are being built.
b.	Angel Plan
	In recent years, the total fertility rate has fallen, accompanying an increase in late marriages among other factors, and the trend toward fewer children has continued. For this reason, the Angel Plan was established in 1994. Under this plan, comprehensive measures are being promoted, such as: a) support for simultaneous child rearing and work, b) support for child rearing at home, c) arrangements for housing and living environments, d) actualization of a relaxed education and a healthy maturation, and e) reduction of child rearing costs. In addition, urgent measures are being taken under this plan to meet diversified child care needs such as child care for younger children and nighttime child care.
c.	Plan for People With Disabilities
	For those people with disabilities, the Plan for People With Disabilities was established in 1995 with an aim at achieving rehabilitation and normalization in the community at all stages of life. It set forth concrete targets in developing health and welfare services, such as developing group homes and welfare homes and increasing the number of home helpers. Moreover, comprehensive measures were decided to be taken, such as the promotion of employment of people with disabilities and that of a barrier-free living environment.
d.	Promoting Community Health Activities
	The flow of community health activities is being established, from the national government to the prefecture and then from the prefecture to the municipality. In the past, the health centers had supported the municipalities. With the demand for a new role of making and supporting the autonomous municipalities, the Community Health Law which was designed to promote comprehensive community health was enacted, replacing the Health Center Law.

(3) Structural Reform of Social Security and Efforts Towards the Creation of Long-Term Care Insurance

: Structural Reform of Social Security

We are in the midst of an ongoing trend towards population aging with fewer children, the changes in the basic economic condition, and a more serious fiscal condition among other phenomena. Under these circumstances, it is necessary for Japan to resolve the public concern over the future of social security and to form a social security system which matches the needs of a mature society and economy. To this end, the time has come when the structure of social security has to be reviewed towards the 21st century while reaffirming its role. Considered significant is the goal of under 50% for the ratio of taxation and social security burden, which is a percentage of taxes and social insurance premiums against national income. It is necessary to steadily implement a social security structural reform based on the consensus of the general public with the following viewpoints in mind:

a.	Achieving higher efficiency overall through reorganization across programs
b.	Ensuring user-oriented services with higher efficiency
c.	Ensuring fairness and equality

Considering these points, a reform of each system developing in the following direction is desirable:

a.	A long-term care insurance system is the first step in social security structural reform. Its early establishment is needed.
b.	It is important to increase efficiency of medical care while ensuring its quality. This should be done starting in 1997 by gradually implementing a comprehensive reform in the entire range of the medical care delivery system and medical insurance system, while maintaining the universal insurance system.
c.	For the public pension, it is important that the system overall is reviewed for achieving the appropriate levels of benefits and burden without causing the burden becoming excessive in the future, while taking into account the balance between the level of benefits and that of real income for the future generations.
d.	For welfare services other than long-term care for the elderly, a service delivery system needs to be developed. It is also important to promote integrated measures to establish comprehensive measures across programs against the lessening number of children and for a livelihood support system for people with disabilities.

: Efforts Towards the Creation of Long-Term Care Insurance

Today, the long-term care issue is the largest cause for concern of the Japanese people about their postretirement life. In the year 2025, the continually aging population is predicted to make the number of people requiring long-term care to 2.6 times that in 1997, or 5.2 million people. Also, the period of time long-term care is required and the age of those caring for the elderly will increase. Therefore, long-term care for bedridden and senile elderly people will become a critical issue.

As a first step towards structural reform of the social security to fight these issues, it is important to reorganize the system of long-term care, which is presently broken down into welfare services and medical care services, and to create an efficient and fair social support system. To this end, steadily building a foundation for long-term care and creating a long-term care insurance system are the critical issues. The goals of a long-term care insurance system are as follows:

a. A system whereby the users can freely choose the services.

b. Offer of welfare and medical care services related to long-term care in a unified and integrated manner.

c. Provision of diversified and efficient services through the participation of entities such as private businesses and non-profit organizations.

d. Rectification of the long-term stay in general hospitals for reasons of long-term care (so-called "social hospitalization") and creation of more efficient medical services.

a.	A system whereby the users can freely choose the services.
b.	Offer of welfare and medical care services related to long-term care in a unified and integrated manner.
c.	Provision of diversified and efficient services through the participation of entities such as private businesses and non-profit organizations.
d.	Rectification of the long-term stay in general hospitals for reasons of long-term care (so-called "social hospitalization") and creation of more efficient medical services.