Template-type: ReDIF-Paper 1.0
Author-Name: Toshihiro Ihori
Author-Name-First: Toshihiro
Author-Name-Last: Ihori
Author-Email: ihori@e.u-tokyo.ac.jp
Author-Workplace-Name: The University of Tokyo
Author-Workplace-Homepage: http://www.pp.u-tokyo.ac.jp/
Author-Name: Ryuta Ray Kato
Author-Name-First: Ryuta
Author-Name-Last: Kato
Author-Email: kato@iuj.ac.jp
Author-Workplace-Name: International University of Japan
Author-Workplace-Homepage: http://www.iuj.ac.jp/
Author-Name: Masumi Kawade
Author-Name-First: Masumi
Author-Name-Last: Kawade
Author-Email: kawade@econ.niigata-u.ac.jp
Author-Workplace-Name: Nihon University
Author-Workplace-Homepage: http://www.nihon-u.ac.jp/
Author-Name: Shun-ichiro Bessho
Author-Name-First: Shun-ichiro
Author-Name-Last: Bessho
Author-Email: bessho@econ.hit-u.ac.jp
Author-Workplace-Name: Hitotsubashi University
Author-Workplace-Homepage: http://www.econ.hit-u.ac.jp/
Title: Health Insurance Reform and Economic Growth: Simulation Analysis in Japan
Abstract: This paper evaluates the drastic reforms of Japanese public health insurance initiated in 2006. We employ a computable general equilibrium framework to numerically examine the reforms for an aging Japan in the dynamic context of overlapping generations. Our simulation produced the following results: First, an increase in the co-payment rate, a prominent feature of the 2006 reform, would promote economic growth and welfare by encouraging private saving. Second, the ex-post moral hazard behavior following the increase in co-payment rates, however, reduces economic growth. Third, Japan's trend of increasing the future public health insurance benefits can mainly be explained by its aging population, and increasing the co-payment rate does little to reduce future payments of public health insurance benefits. Fourth, the effect on future economic burdens of reducing medical costs through efficiencies in public health insurance, emphasis on preventive medical care, or technological progress in the medical field is small. Finally, a policy of maintaining public health insurance at a fixed percentage of GDP will require reducing public health insurance benefits, perhaps up to 45% by 2050. Such a policy also reduces economic growth until approximately 2035. Our simulation indicates that the reform does not significantly reduce future public health insurance benefits, but it can enhance economic growth and welfare by encouraging private saving.
Classification-JEL: C68, D58, E17, E62, H51, H55, H62,I18, O40
Length: 46 pages
Creation-Date: 2011-09
Number: EMS_2011_17
File-URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2011_17.pdf
File-Format: Application/pdf
File-Function: First version, 2011
File-Size: 445KB
Keywords: public health insurance; Japan; national medical expenditure; economic growth; aging population; dynamic CGE model
Handle: RePEc:iuj:wpaper:EMS_2011_17