This work is aimed at providing a quantitative analysis of the impact of population aging in Japan on financing its National Health Insurance program. We construct a general equilibrium life-cycle economy that is used to study the impact of an aging population on household's work and savings behavior, as well as on aggregate output and welfare. In particular, taking 2010 as an initial starting point, we calculate the transition path predicted by our model as the population structure changes and medical costs increase. We also evaluate various policy alternatives designed to lessen the negative impact of aging on the economy.