Reasons Why Elderly Housing in Japan Can Be Affordable: 'Long-Term Care Insurance' [Senior House]

by Park Eugenie

by Sim NaYoung

by Kang Jinhyoung

Published 27 May.2024 10:48(KST)

Updated 03 Jun.2024 10:50(KST)

Affordable Senior Housing Operators
Operate Care Services Covered by Long-term Care Insurance

Win-Win Policy for Residents and Operators

South Korea's Senior Welfare Housing
Needs Ways to Lower Rent and Secure Revenue

On the 24th of last month, a social worker is supporting an elderly woman as they enter a senior housing facility in Tokyo, Japan. Photo by Yujin Park

"Last year's sales were 183 million yen (about 1.6 billion KRW). After paying wages and operating expenses, we made about a 6% profit (around 100 million KRW). The rent we receive from the elderly is very low, so just receiving that results in a deficit. Japanese senior housing operators can continue their operations thanks to long-term care insurance."

Watanabe Shoichi (51), the representative of a senior housing facility on the outskirts of Tokyo, said, "It is no exaggeration to say that Japan's senior housing system is supported by long-term care insurance." Japanese senior housing operators earn stable income by running rental businesses alongside 'home visit care services' covered by long-term care insurance. Long-term care insurance is Japan's version of 'nursing care insurance.' Local governments provide medical and care services according to nursing care levels through senior housing operators.

Reasons Why Elderly Housing in Japan Can Be Affordable: 'Long-Term Care Insurance' [Senior House]

When resident seniors apply for home visit care services such as bathing, walking, and rehabilitation exercises, care workers and nurses employed by the senior housing operator assist them. Thanks to the local government processing the service costs through insurance, seniors only pay 10-30% of the total cost. Because of this low burden, not only residents of senior housing but also local elderly people frequently use these services.

Korean senior welfare housing operators advised that measures are needed for residents and operators to have a 'win-win' relationship like in Japan. An operator of a senior welfare housing facility in Seoul emphasized, "Even if we charge monthly rents of 2 to 3 million KRW due to rising prices, there is little profit left," and added, "We need to find ways to lower monthly rents for middle-class seniors like in Japan and secure operating profits."