TOKYO -- Japan's health minister warned the country has "no time to lose" in heading off a healthcare crisis as the population ages and the pool of workers supporting its universal insurance system shrinks.

Demographic change is the "biggest" challenge for Japan's medical system, Kenichiro Ueno, the minister of health, labour and welfare, told Nikkei Asia in an interview at his Tokyo office. "The sustainability of Japan's universal health insurance system is being called into question," he added.

Japan's national healthcare insurance covers a range of approved care, and residents typically pay 30% of medical fees. Some, including most people aged 70 and above, pay just 10% to 20%. The system is paid for by tax revenue and insurance fees.

The number of people aged 65 or older is projected to peak around 2040, when their numbers will reach more than 39 million, or about 35% of the country's total population. The working-age population, those aged 15 to 64, meanwhile, is expected to drop to 62.1 million in 2040 from 73.1 million in 2025, according to the government's forecast.

The pressure is coming from both ends: more older people will need care as the working-age population that staffs and finances the system shrinks. Ueno, a lawmaker with the ruling Liberal Democratic Party (LDP), said he is "working on the continuous reform of the system itself as an urgent issue." The ruling coalition of the LDP and its junior partner, the Japan Innovation Party, is planning to decide on a timeline to make more elderly people pay 30% of their medical fees.

Kenichiro Ueno tells Nikkei Asia that "the sustainability of Japan's universal health insurance system is being called into question." "Going forward, we must ensure that people pay [for the social security burden] according to their ability," Ueno said.

The ministry is also planning to take steps so it can better gauge older people's income, including investment income such as from dividends that is often overlooked under the current system.

Ueno, 61, also stressed the importance of narrowing the gap between life expectancy and healthy life expectancy as much as possible. If people remain healthy up to about 100 years old, he said, "that could help curb medical costs and expand the pool of people supporting the social security system." Looking ahead to 2040, the health ministry is working with municipal governments to ensure regions across Japan can plan for efficient healthcare operations, including how many hospitals they will need and the types of care they should provide.

"Unless we start taking proper measures now to train and secure the necessary workforce," the minister said, "there could be problems such as some regions being left without doctors." Doctors tend to be scarce in rural areas or in some essential departments, and many prefer to work in fields such as cosmetic surgery that are not covered by insurance and tend to be more profitable.

"It is important to create a system that can support healthcare no matter where you are in the country," not just with doctors but also with nurses and other healthcare workers, he said.

While businesses across sectors and industries are struggling against Japan's labor crunch, many are hiring foreigners. But few of these foreigners are working as nurses According to Ueno, Japanese themselves should meet the country's nursing demand. He said many are qualified as nurses but are not working in the profession, suggesting improved working arrangements to attract them back.

"Because there there are as many as 700,000 potential nurses" already here, he said, "it will not immediately be about [calling for talent] from abroad." Ueno also spoke of using technology to support the country's healthcare service. As artificial intelligence is expected to provide more support, this would "help maintain a certain standard of medical care," he said.