• I00;
  • I10;
  • I18;
  • I19

We examine how Japanese health insurance societies finance (or distribute) the costs (or cost savings) from an increase (or decrease) in contributions to the Health Service Systems for the Elderly. Three ways are possible: (i) adjusting the premiums of the employee or employer; (ii) providing an optional benefit; and (iii) adjusting reserves by the change in contribution. We find that more than six-sevenths of the changes are associated with changes in reserves, followed by premiums, and finally optional benefits. The increase in the premium mostly shifted to employees, while employees enjoyed a nearly 60% decrease in total premium.