For fiscal 2026, the government plans to lower drug fees by 0.87 percent but raise medical service fees by 3.09 percent, the first increase above 3 percent in 30 years.

Efforts to reduce burden on Japan’s working generation still limited

(The Japan Times/ANN) -- While the government’s fiscal 2026 budget bill, adopted, calls for record-high spending on social security, its efforts to reduce the health insurance premium burden on the working generation are still limited.
The budget bill allocates a record ¥39.06 trillion for social security-related expenses, up ¥760 billion from fiscal 2025, reflecting a rise in medical and nursing care costs due to an aging population, as well as a sharp rise in medical fees under the public health insurance system.
For fiscal 2026, the government plans to lower drug fees by 0.87 percent but raise medical service fees by 3.09 percent, the first increase above 3 percent in 30 years.
The medical fee hike was decided on based on an initiative by Prime Minister Sanae Takaichi at a time when many medical institutions are struggling with inflation and amid pressure to raise wages.
Meanwhile, the estimated reduction in the health insurance premium burden over the three years from fiscal 2026 is limited to ¥460 billion.
The Japan Innovation Party (Nippon Ishin no Kai), which is part of the ruling bloc, had sought to end public insurance coverage for prescribed medicines with ingredients and effects similar to those of over-the-counter drugs, with the aim of slashing annual medical spending by several hundred billion yen.
However, the party abandoned this idea due to the face that it would increase the burden on patients. Instead, the government decided to impose additional charges for these drugs starting in March 2027, which is expected to reduce annual medical spending by about ¥90 billion.
Amid concerns from patients, the government also narrowed a planned hike in the cap on out-of-pocket medical expenses and postponed a conclusion on the issue of expanding the scope of people age 65 and over who are subject to a higher out-of-pocket payment rate for nursing care services.
The Takaichi administration now plans to review the out-of-pocket medical payment rate for people age 70 and over, a move likely to provoke a backlash from elderly people.

(Latest Update December 29, 2025)