ABSTRACT
This chapter describes Japan's innovative Long-Term Care Insurance (LTCI) scheme, examines the extent to which its goals have been attained, and describes the problems that have arisen through its implementation. Increasing reliance on social hospitalization gave rise to a couple of problems that resisted easy solution. The increase in social hospitalization also caused an upsurge in medical care expenditures. Long-term care policy in the early 1990s was structured to facilitate goals of the Gold Plan and to extend long-term care services to all older adults in need of care, regardless of caring capacity of their families. The national Ministry of Health and Welfare issued its Revised Guidance on Management of Home Help Services in 1990. The LTCI scheme is financed by both individual contributions and general revenue from central and local governments and it introduced a free-market mechanism into Japan's long-term care system. First, as insurers of the LTCI scheme, municipalities bear responsibility for its administration.
