The new LTCI program departs from past Japanese practices in severalimportant respects. It aims to(1) shift amajor responsibility forcaregiving fromthefamilytothestate;(2)integratemedicalcare and social services via unified financing; (3) enhance consumer choice and competition byallowingfreechoice ofproviders,includ- ing even for-profit companies; (4) require older persons themselves to share the costs via insurance premiums as well as copayments; and (5) expand local government autonomy and management ca- pacity in social policy. The government plans to expand the new program gradually over ten years, leading to a major expansion of community-basedcare,afundamentalreformoffinancingandregu- lation of institutional care, and, more generally, a flexible approach to social policy based on individualentitlement andchoice.