With fertility rates declining globally, many countries are seeking new ways to support infertility treatments and healthy childbirth. This article explores the journey toward progress in Japan and the role insurers can play, offering valuable insights for markets worldwide.
Mitigating the many challenges due to Japan’s ongoing declining birthrate trend – now in place for more than half a century – has been a priority for the nation for many years.
Although Japan continues to shine globally in metrics such as educational attainment, population health, and infant mortality, combating the societal and demographic outcomes of the low birthrate, mainly seen in the shrinking population and increasing average age, is an important priority for the country’s leadership.
Japan’s current fertility rate of 1.26 – one of the lowest in the world – is far below the 2.07 replacement rate needed to sustain a level population. A range of societal trends specific to Japan such as rising average marriage age for men and women (31.1 and 29.4, respectively), higher ages of women at first birth (32), the increase in lifetime unmarried rates, low immigration, cultural resistance to single motherhood and same-sex parenthood, and the evolution of societal expectations around women and work, if they continue, will all challenge the possibility of reversing the shrinking population and increasing average age.
A priority for Prime Minister Fumio Kishida since his election in 2021 has been improving Japan’s fertility rate by encouraging the development of additional federal government support for the financial challenges families experience around childbirth and infertility. Currently, neither prenatal care nor “normal” childbirth (birth without medical complications) is covered by Japan's national health service (although some support is available from local municipalities). In addition, there is insufficient federal support for childcare.
It is estimated that approximately 12% of Japanese women of childbearing age who wish to become pregnant are needing medical assistance to do so. The peak of infertility treatment is now for women in their late 30s, which is to be expected as age compounds fertility challenges. And the treatments are reaping results, with the number children born due to these treatments continuing to rise.
Some new and positive initiatives have already emerged in response to Mr. Kishida’s efforts. In 2022, six new surgical codes (K-codes) were introduced by Japan's national health service specifically for infertility treatments. The additional assisted fertilization procedures now covered include in-vitro fertilization (IVF), intracytoplasmic sperm injection (ICSI), testicular sperm extraction, and embryo culture, transfer, and freezing. Assignment of medical codes is important in Japan because claim payment criteria for insurers are determined in conjunction with medical procedures approved by the public health care system. Although only surgical treatments were covered for infertility, all exams on pregnant women and their fetuses, such as ultrasonography and genetic testing, are collectively subsidized by the local government up to a certain amount. Consequently, additional advanced medical care is self-paid.
More changes in cover may be coming in the next few years. Discussions are slated to begin in 2026 around enabling public health insurance coverage of “normal” births, i.e., births without complications. The share of normal births in Japan ranges from 79% for mothers in their early 20s to only half for those in their early 40s, declining with age. Therefore, the impact of insurance coverage of normal birth is greater at younger ages, increasing the overall number of insured deliveries by more than three times.
Recent advancements in infertility treatment technologies are offering more hope to individuals facing infertility. These technologies, ranging from improved diagnostics to advanced treatment modalities, are refining medicine’s understanding of and ability to address the various pathophysiologies of infertility. Also, as these technologies become more widely accepted, they are likely to result in an increasing number of viable pregnancies and births among women of older ages. With these improvements, insurers will need to look carefully at rates for women overall as well as eligibility ages for fertility treatments and adjust them if needed.
Another issue for insurers may be claims administration. Unlike other types of medical treatments, infertility treatments can involve several sequential procedures, each of which must currently be claimed for individually. This leads to multiple claims and payments in a short time period, which can pose challenges for insurance companies in terms of claim assessments, claims management, and payment structures.
Although the number of infertility treatments is increasing in Japan as people reach their late 30s, healthcare coverage of normal birth will have a significant positive impact on younger age groups. As a result, combined with infertility treatments, the impact of having available cover for pregnancy and childbirth would extend to the entire fertility cohort, taking into account social demands.
Clearly, insurers will need to be prepared for higher claims experience and will need to adapt their coverage and claims guidelines to provide affordable access.
Increased support will also be vital for prenatal care, childbirth care, and childcare for all women of childbearing age, but especially for women in their late 30s and early 40s seeking to become pregnant. These expenses are essential aspects of reproductive choices. For Japanese insurance companies, aligning coverage guidelines with changing demographics and societal expectations, and ways to fulfill these needs, will be crucial in supporting individuals seeking to start a family.
The nation's federal and local governments as well as employers can provide family-friendly supportive measures such as flexible working arrangements, improved childcare facilities, and focused subsidies, to families with children. All of these can be part of an overall effort to address the declining birthrate. Insurance companies should consider aligning their policy guidelines and product development efforts with evolving societal needs to contribute to the broader goal of improving the country’s birth rate.
Reversing Japan’s declining population trend will require more than a few adjustments. It will need a coordinated and multifaceted approach, with insurers playing a pivotal role in addressing access and affordability for infertility treatments, prenatal care, and childbirth care.
As societal norms evolve and fertility treatments become more prevalent, insurance companies must adapt to meet changing policyholder needs. By successfully navigating the various complexities around birthrate trends, technological advancements, and potential shifts in public insurance coverage, Japan can move forward into a more sustainable demographic future.
At RGA, we are eager to engage with clients to better understand and tackle the industry’s most pressing challenges together. Contact us to discuss and to learn more about RGA's capabilities, resources, and solutions.
