This paper aims to provide a quantitative analysis of the influence of an aging population on the financing of Japan’s universal health insurance system and potential reform policies. We construct a general equilibrium life-cycle model to study the effects of aging on the tax burden, individual behaviors, the aggregate economy, and welfare. We also evaluate various policy alternatives designed ...

• Health benefits a big potential target for raising revenue: President Bush’s FY 2008 budget estimates all employee benefits-related “tax expenditures” (government revenue foregone due to special tax treatment) will amount to $328 billion next year, or 34 percent of the $961 billion worth of total tax expenditures in the federal budget. Tax-favored employment-based health insurance benefits ac...