Over 40% of the 1,394 health insurance societies set up for employees of large companies and their families are estimated to report losses for the financial year ended 31 March 2018 (FY2017). In the previous year, the proportion was 38.7%.
As a whole, the societies would normally be expected to be in the black, but their net profit in FY2017 is estimated have dropped by some JPY100bn ($892m) from a year ago to just over JPY130bn, sources told Jiji Press.
The loss expansion and profit shrinkage reflected the substantial increase in contributions each society made to the medical care system for elderly people aged at least 65.
According to the sources, the average premium rate for the societies is projected to rise from the previous year to just under 9.2%, a record high.
If the rate at each society for major firm employees tops 10%, which is the average of prefecture-by-prefecture rates used by the state-subsidised Japan Health Insurance Association (Kyokai Kenpo) for workers at small businesses, there will be no reason to exist as independent societies that offer preferential rates for their members.
According to an estimate by Kenporen, contributions to the medical system for the elderly will exceed insurance payments to society members in FY2025.
With premiums for the working generation on the rise in line with growing medical expenditures for the elderly, an increasing number of health insurance societies have been disbanded or started moving toward dissolution since the beginning of this year.
By the end of this month, for instance, the Health Insurance Society for Temporary Workers in Japan, or Haken Kenpo, is expected to discuss whether to dissolve itself this fiscal year. With about 510,000 members, Haken Kenpo is one of the largest health insurance societies in the country. If it disbands, its members would join Kyokai Kenpo.
In May, Kenporen and Kyokai Kenpo urged the government to require that people 75 or older pay 20% of their medical costs out of pocket in principle, up from the current 10%. The proposal was backed by major business organisations including the influential Japan Business Federation, or Keidanren.
The Ministry of Health, Labour and Welfare is seeking funds for the next fiscal year to help prop up health insurance societies, according to other local media reports.