"Long-term Care Insurance Saved Both Japanese Senior Housing Residents and Operators" [Senior House]

[15]"The Foundation of Japan's Senior Housing Boom is Kaigo (Nursing Care) Insurance"

Each Senior Housing Must Have a 'Visiting Care Office'

Residents Can Request Services Like Walks and Baths When Needed
Costs Covered by Kaigo Insurance, No Financial Burden

Important Business for Operators
Rent Alone Cannot Sustain Operations...Profit Through Visiting Care Services

On the 24th of last month, Grandma Ogawa Yumiko, living in the elderly housing "Teresa Care Home" in Kawasaki City, Japan, is walking with the support of a social worker. Photo by Park Yujin

There is one common facility on the first floor of middle-class elderly housing throughout Japan. It is the ‘Home Care Service Office.’ When elderly residents in these housing facilities need additional services such as taking a walk, bathing, or rehabilitation exercises, they simply go to the ‘Home Care Service Office’ and apply. The elderly only need to pay 10-30% of the total cost depending on their financial situation, so there is little burden. The remaining costs are covered by long-term care insurance.

On the 24th of last month, we met 83-year-old grandmother Yumiko Ogawa at the elderly housing ‘Teresa Care Home’ in Kawasaki City, Japan. She said, “Even if I want to take a walk, I can’t walk well, so someone has to support me closely.” She added, “Thanks to long-term care insurance, I can go outside whenever I want without worrying about money by applying at the office on the first floor. Then a care worker comes and takes me out right away, which is really nice.”

Home care services covered by long-term care insurance are also an important business for elderly housing operators. An operator of an elderly housing facility in Japan hinted, “If we don’t have income from here, we run at a loss.” Subaru Fukumoto, the representative of Teresa Care Home, also explained, “Because the monthly rent is low, it is impossible to operate the business solely on rent received from residents. The more people use the home care services, the more beneficial it is, and it has become a major source of income for operators.”

Fukumoto Subaru, CEO of Teresa Care Home, a senior housing facility in Kawasaki City, Japan, is being interviewed by Asia Economy on the 24th of last month. Photo by Park Yujin

The eligibility for receiving home care services is also very broad. According to the Ministry of Health, Labour and Welfare, 89% (as of 2021) of residents in service-provided elderly housing for middle-class seniors have been assigned long-term care levels. All of these individuals can use home care services. It is known that it is much easier to receive long-term care levels in Japan compared to Korea. The scope of application is wider. Many grandfathers and grandmothers who can live alone are also eligible for long-term care levels.

Professor Jeonggeun Kim of the Silver Industry Department at Gangnam University diagnosed, “In Korea, there is a tendency to completely separate ‘elderly welfare housing’ recipients and ‘nursing home’ recipients based on whether they can walk alone or not. But Japan does not do that.” Professor Kim explained, “Home care services covered by long-term care insurance benefit both residents and operators, forming the foundation of the elderly housing business in Japan. This is why Japanese seniors can enter elderly housing and live there until they pass away.”

[15] "The Foundation of Japan’s Elderly Housing Boom is Long-Term Care Insurance"