A Study on the Financial System of Long-term Care: Lessons from Long-term Care Insurance in Japan

Recently, Taiwan has entered the aging society. Long-term care is becoming a major social policy issue. The patterns of assuming responsibility for the care of elderly by the families or individuals in the past, has been unable to respond to the increasingly heavy long-term care needs. The government had to take responsibility for the construction of long-term care system. However, the financial capacity of the government has its limits. It is hard for the government to provide sufficient long-term care services only by limited taxes. Thus, social insurance system has been used to release the burden on the government, but how to design or revise long-term care insurance system still needs further discussion. Japan implemented the long-term care insurance in 2000. As a social insurance, the insured has to pay a premium in order to afford the expenses of insurance. Also, the financial system has to keep self-sufficient. The social insurance contains the spirits of social solidarity and risk-sharing. Although the long-term care insurance in Japan has been through several reforms, the financial problems still exist. This thesis compares the backgrounds of development of long-term care insurance in Taiwan and Japan, and further evaluates the drafts of long-term care insurance in Taiwan. Taking Japan as an example, we can lead the long-term care insurance in Taiwan to the right direction.