Following the fiscal 2026 budget's record ¥39.06 trillion allocation for social security, Japan's government has finalized two key reform measures to curb soaring medical costs, including higher patient copayments and limits on insurance for certain drugs. Officials emphasize the need for clear explanations to secure public understanding.
Japan's government has settled on concrete plans for two central elements of social security reform, building on the fiscal 2026 budget approved December 27 that set a record ¥39.06 trillion in social security spending amid rising medical and nursing care costs from an aging population.
Under the high-cost medical care benefit system, which caps out-of-pocket payments for expensive treatments, copayments will rise by 4% to 38% based on annual income, phased in by August 2027. For incomes between ¥6.5 million and ¥7.7 million, the monthly cap will increase from around ¥80,000 to ¥110,000, with a new annual limit of ¥530,000 to prevent excessive burdens.
This follows criticism of the prior administration's proposal last year to raise the cap by up to 73%, which faced backlash from opposition parties and patient groups over deterring care-seeking. Prime Minister Sanae Takaichi's cabinet aims to engage stakeholders more effectively.
The second measure partially excludes prescription drugs similar to over-the-counter products from public insurance. Of about 7,000 such medicines, coverage continues for roughly 1,100, with patients paying 25%. The Japan Innovation Party sought full delisting, but compromises addressed concerns from the Japan Medical Association about reduced doctor visits and skipped medications.
These reforms are expected to save ¥90 billion from drug adjustments and ¥160 billion from the high-cost system, though modest relative to ¥50 trillion annual medical spending. Broader scrutiny remains key for sustainable changes.
