Abstract
We attained a universal social security system almost half a century ago. The system was created based on the separate schemes established at the end of the last World War. The universal system consists of pension insurance and health insurance systems, both of which are composed of residence-based and employment-based schemes. The employment-based schemes rely on payasyou-earn insurance contributions but the residence-based schemes are dependent on either flat or lower insurance contributions based on voluntary income declaration. As yet the residencebased schemes provide nearly half the equivalent of the insurance benefits of the employmentbased schemes supported by unjustifiably heavy state subsidies from general revenue. We once attained free medical services for the elderly aged 70 years and over with co-payment covered from general revenue, although the free services only survived for less than a decade. One must note that many people covered under employment-based health insurance while they are young and earning relatively higher income come into residence-based health insurance once they retire with less income and often poorer health.
With an ever lower birth rate and the first wave of baby-boomers after the war approaching retirement age, our population is ageing quite rapidly compared to other developed countries. Thus our social insurance system, even with the recent addition of social care or long term care insurance, is facing the issue of inter-generational social justice as well as critical financial difficulties which are most urgent in the case of residence-based health insurance schemes. We all agree that our system requires a comprehensive overhaul, but so far we have only added partial reforms one after another and undermined public confidence in the system. In this article the author presents international illustrations from Great Britain and Sweden and proposes a new unified social security system based on the idea of selective universality.
