The whole purpose of social security systems is for societies to provide their members with support for the challenges and risks of life that are difficult for individuals to shoulder on their own. We believe the following three approaches are critical for overhauling the current system and ensuring its long-term viability.
First, set co-pays at levels commensurate to insurance enrollees’ ability to pay, according to the principle of paying according to means, regardless of age: Income and assets would determine co-pay rates—the out-of-pocket percentage of an enrollee’s medical or care bill. Specifically, rather than having the elderly pay a lower rate than other age groups on the assumption that the older they are, the less able they are to pay—a hallmark of the current system—individuals would be assigned co-pay rates by ability to pay. This would bring us closer to the ideal scheme, in which the cost of all members assisting each other would be fairer.
Second, programs must be realigned with the principle that public insurance programs are founded on—that society’s members should cover small risks themselves but take on the big risks collectively. Specifically, insurance would still cover most of the expenses for big events like illnesses requiring hospitalization or surgery, while individuals would shoulder higher co-pays for less-serious ones like colds, muscle pain, and things that can be treated with over-the-counter medicine. This would make it possible to allot more resources to more-critically needed services.
Third, effective utilization of digital technologies would enable better and more-convenient public services while simultaneously reducing costs and frontline workloads. For instance, deploying digital technology would do much to hold down the administrative costs of processing paperwork for getting assistance to those who are in distress. And at the same time it would make it possible to provide rapid, proactively offered assistance commensurate to individuals’ income—to those in dire need of it. In health- and elderly-care theaters, too, digitalization would be beneficial, lightening workloads by, for example, letting machines take over certain administrative processes.
Unfortunately, plenty of hurdles stand in the way of these three approaches to a system overhaul. For one thing, it will be tough to win society-wide consensus for changing the system, and there will likely be resistance due to concerns regarding the new system. Along with wide-scale public involvement in the planning process, this makes indispensable local pilot projects across the country to identify the benefits and side effects that changes will bring.