Insurance Policy/ Tax Policy

From the public released data, we know that Japan is now carrying out the policy of both tax and insurance; while in Taiwan, it is still only tax policy for the resource of long-term care finance. Through gaining the insight into the interview scripts, we found out that the scholar (J4) support for the insurance policy rather than the tax one.

“Compare to insurance policy, tax policy is less steady when it comes to long-term care financial resources. Plus, we have to go through congress to increase the amount of tax but not for the premium. Hence, insurance policy is more financially efficient comparing to the tax one.” (J4)

As for the others in Japan, they think that as long as the financial resources are steady, the people are supportive, and the relevance between the policy and the financial resources is high, any policy could be a good one. However, from the responds, most of them seemed to allude that Taiwan’s ongoing tobacco and gift tax policies are not quite ideal.

“For long-term care, I don’t think it’s proper to carry out the particular tax policies that are not steady. In Japan, we use consumption tax as one of the financial resources to pension, medical, and long-term care. On the aspect that consumption tax is a steady resource, it is more ideal than either tobacco or gift tax.” (J1)

“I think the most important point is whether the policy can win public support.” (J2)

“I don’t find tobacco tax any relevant to long-term care so I’m not sure if it’s a good resource… Preferably, a financial resource that could be independently procured, such as long-term care tax.” (J5)

“The clearness of the relationship between the burden and benefit of long-term care is important, so does the relevance between them. For Japan, the relationship is obvious that the money we are paying now is for the long-term care we are having in the future;

in this sense, people would be more understandable. Also, Japan has now increased the

consumption tax for the support of long-term care and medical care. I don’t think gift tax is relevant to long-term care, so the financial resource seems unsteady.” (J6)

For Taiwan’s NPO (T2) and the scholar (T4), they both support for Japan’s insurance policy.

“I think the design of Japan’s policy of long-term care financial resources is nice. They are using both tax and insurance policies…I think it’s a shame that Taiwan’s government once decided to promote the insurance policy but I don’t think they will now because they stick more to the concept of social welfare.” (T2)

“If the government is not willing to increase the tax, the tax policy won’t last long. There’s only tobacco and gift tax in Taiwan for long-term care, and aging is a trend; therefore, the financial resources are not only unsteady but also impossible to sustain financially. If tax policy is continuing, the budget has to be checked annually, and it has to compete with other budgets such as national defense and education. Plus, for the annual budget approval, the budget would be assigned from central government to local ones, and that would lead to the gap in the administration process. Usually, when the forefront gets the money, the annual budget plan has already started for 3 months. Then, after October, it’s the end of the budget plan. If we want a steadily developed long-term care, it shouldn’t be like that. Insurance policy won’t lead to this kind of problem because it has a fund. As long as you are a contract institution, the budget would be allocated to you first; but there is a lot of paperwork and the cost of administration process is enormous for tax policy. I think only insurance policy can steadily develop long-term care. In order to seem steady, the government promotes contract policy but the financial resource is tax policy, so it’s really weird.” (T4)

Besides, though the scholar (T3) didn’t obviously show the preference, he/she stated that the tax policy in long-term care could only be continued when the family support network is strong, and it is not a solution to the issue of financial sustainability.

“It’s impossible for the government to use tax forever in long-term care because tax base has to compete with other taxes. Therefore, usually tax policy can only be continued on the basis of strong family support.” (T3)

As for the public sectors in Taiwan, which are local government (T1) from the interview and the central government from the public released data, they view tax policy either a good one or a policy we should continue enforcing for now. The local government (T1) said as follow that we still need time to complete the basic resource constructions, and after that we can decide which policy to adopt in the future:

“Since we are still under the resources construction now, if we don’t utilize tax policy until the resources to be well-constructed and then change to the insurance one, it will be like the health insurance in Taiwan, which almost every private sector gathered in the populated area. In this way, the remote area will be more isolated. So I think we need to take time to finish the basic long-term care resources construction first due to Taiwan’s ongoing lack of resources. After that, we can discuss which policy to adopt.” (T1)

As for the public released information from the central government, they regard tax as a steady financial resource for long-term care. According to Social Stability- Long-term Care 2.0 by Ministry of Health and Welfare (2016),

“In order to enlarge and to stabilize the financial resource of long-term care, the resources would not only be health and welfare surcharge of tobacco products but also tobacco tax, gift tax, and House and Land Transactions Income Tax.” (p. 10)

To sum up, most Japanese respondents do not consider Taiwan’s tax policy toward long-term care a valid financial resource for long-long-term care; so does some other respondents in Taiwan. However, Taiwanese governments clearly hold a different view.

4.4 Sustainability Scheme

Sustainability scheme will be the last but not least institutional aspect when it comes to long-term care financial sustainability. There are some elements worth comparing and discussing in both countries. From the respondents’ suggestions to the issue, it can be

categorized in 5 main points: Securing of financial resources, retrenchment, prevention, political support, and Private-Public Partnership.