Japanese health insurance industry faces winnowing out

Main Category: Health Insurance / Medical Insurance
Article Date: 21 Mar 2004 - 0:00 PDT

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A record number of health insurance societies for employees of large companies are expected to dissolve in fiscal 2003, according to a survey by the Health, Labor and Welfare Ministry, Japan.

According to the survey, 36 corporate health insurance societies have disbanded since April 1. Since more such associations are expected to dissolve by the end of the month, the total figure is expected to outnumber the record high of 37 set in fiscal 2002.

The dissolution of corporate health insurance associations for employees of large companies began to be noticeable in fiscal 1998. Sixteen such associations dissolved in fiscal 2000, and 26 in fiscal 2001.

The increase is believed to be due in part to cuts in insurance premium revenues amid the prolonged economic downturn.

The number of such societies that are expected to lose money in fiscal 2003 will decrease to 985 from 1,347 in fiscal 2002 thanks to an increase in the ratio of medical fees covered by salaried workers in April.

But many health insurance societies with smaller corporate members are believed to have been forced to dissolve as they are finding it difficult to continue completing the clerical procedures involved, and their financial conditions show no prospects of improvement.

Corporate employees will be covered by the government-run health insurance program after their corporate health insurance societies disband, and they will be unable to enjoy a medical bill reduction program operated independently by corporate health insurance societies.

The health ministry is expected to discuss measures that would expand the scale of corporate health insurance societies.

According to the measures, consolidation of corporate health insurance societies, which currently is permitted only between those in the same trade, will be allowed across industries. Prefectural-based health insurance associations also will be established.

http://www.yomiuri.co.jp/newse/20040322wo31.htm