UPDATE – March 2010
Japan Today reported that in March the ambiguous Japanese immigration policy that seemed to force foreigners to join the National Health Care system —Guideline No. 8— has been officially deleted (See original Japanese version here). The article also goes on to say, “Although Immigration will encourage enrolment in Japan’s social system by distributing brochures, individual offices and officers are ‘forbidden’ to pressure anyone to join. In fact, the new guidelines state clearly that enrolment in the social system will in no way be tied to visa renewal.”

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The Japanese government will tell you it’s the law to buy into the Japanese Health Insurance system but this is a lie. Health Insurance, like most laws in Japan involve a big grey zone. A more accurate statement by the Japanese government would be, “Pretty please join our super expensive medical coverage but if you don’t, we can’t force you to.” There is no way penalty for not joining the system and as long as you’re a fine outstanding citizen it won’t effect your VISA or Permanent Residence application in any way.

In the summer of 2009 the Japanese government made a surprise announcement that getting your new VISA would require you enrol into the Japanese Health system. It was later clarified by the government that the new “no health insurance, no visa” law in fact wasn’t a law at all but just a guideline with no legal standing. In other words you can’t be denied a VISA for the sole reason of not having Insurance. This doesn’t mean that Japanese government officials won’t tell you that you, “have” to enrol into the government Health system but the best way to brush them off is to just say you have private insurance whether you do or you don’t.

Now that doesn’t mean you shouldn’t have health coverage in Japan. There are many private companies (Interglobal and IMG are some of the bigger ones) that offer good private health coverage for relatively cheap rates. Interglobal offers a silver plan that covers you 100% in Japan and all over the world ( except the US ) for around $1000 a year. Here is a more detailed breakdown of insurance companies although its a little dated being from 2002.

Joining the system

Now if you want to join the system for whatever reason the first question is why?? There is no legal reason. If you do join the government plan the Japanese system will only cover 70% of your medical bills while taking a large chunk of your pay check every month while the private plans listed above will cover you for 100% of hospital bill for a fraction of the cost. Also if you’ve been in Japan for longer than a year you will have to pay a Health penalty for the time you’ve stayed in Japan. Depending on your city government this could mean anywhere from 5 years to 2 years back payment in one lump sum. The monthly payments are based on your city taxes but the average worker is going to pay around 20,000 a month into the health system. So if you have to pay 3 years back payments thats 600,000 YEN (About $6000) and you can’t deduct any payments you’ve been making to private insurance.

Now if you still want to join first you need to decide which of the Japanese plans will fit your needs:

Break down of Japanese Health system

In Japan there are two major health plans in Japan (There are six other very specific minor plans )

1. Employee health insurance (kenkou hoken, 健康保険)
2. National health insurance (kokumin kenkou hoken, 国民健康保険)

Like the name implies the Employee plan is supposed to be taken care of by your company and the National plan is for independent workers or employees an employer doesn’t want to cover.

Employee health insurance (kenkou hoken, 健康保険)

If you are a foreigner in Japan your company will most likely either not tell you about the Employee plan or do everything in their power to keep you off it as they are by law supposed to pay 50% of the cost of the monthly payment. But it is not just foreigners who are kept off the company’s health coverage plan; Japanese companies are increasingly kicking their employees off or not adding new employees to their company plan as a way to increase profits. Millions of Japanese are left uninsured even though the law requires Japanese companies to cover them.
Under the Employee health insurance if you get sick you will apply for the following:

-70% of all medical costs
– 60% of salary from lost days (beginning from the third day absent from work due to injury or sickness)
– High-cost medical expenses cannot exceed 80,100 yen/month
– 0% interest loans are available to cover excessive costs

National health insurance (kokumin kenkou hoken, 国民健康保険)

This is the plan you will most likely join. If you fall sick you can receive the following benefits:

-70% of all medical costs
– High-cost medical expenses cannot exceed around 100,000 yen/month
– 0% interest loans are available to cover excessive costs

Top up coverage

As both of the above only cover 70% of the costs it is worth while to look into a TOP UP plan to cover the remaining 30%. AFLAC and Intergobal both offer good coverage for around 25,000YEN.

Calculating Japanese Health care costs

The formula for paying into the medical system varies a little from city government to city government but for this example we’ll use the Shinagawa forumla:

(Family members in your house x 31,200) + (Family’s total city tax x .80) = A

(Family members in your house x 8,700) + (Family’s total city tax x .23) = B

Then add A + B to get the total amount for the year (The medical system monthly payments start in June and end in May)

So if you have one person in your household and your annual city tax payment was 150,000YEN then it would like this:

(1 x 31,200) + (150,000 x .80) = A

(1 x 8,700) + (150,000 x .23) = B

A + B = 194400 YEN (or 16,200YEN monthly payments)

Cost Break down

In the table below are three options for 100% medical coverage based on making enough money to get a 150,000 city tax bill.

Name of coverage plan Monthly cost
Employee health insurance 1 8,100 2 + 2000 TOP UP3 = 11,100 YEN
National health insurance 1 16,200 + 2000 TOP UP3 = 18,200 YEN
Interglobal private insurance US$83 = 7200 YEN4

1- In the Japanese system the amount you pay will go up according to how much you make where as health coverage outside the Japanese Health program, like with a private insurer, will stay the same.
2- Employee pays half of medical premium cost
3- Based on cheapest TOP UP plan provided by Interglobal
4- Yen dollar conversion based on Dec 2009 rates for the Interglobal silver plan which offers $1000 yearly premium for 100% coverage

Which is best for you?

So as you can see if you’re getting around 150,000YEN annual city tax bill the Japanese health system is almost twice the price of private insurance.  However, 150,000 YEN city tax bill isn’t very much; probably the average Eikawa job.  Any decent job in Japan will pay more which means you’ll have to pay more city taxes which in turn means a higher city tax bill and higher Japanese Health Insurance premiums.  Now you can reduce the amount you pay in city taxes by following some tax advice from GaijinTax.com and that will in turn reduce your monthly medical payments.   Even with the tax advice though if you make a lot you’ll pay a lot.

One more thing to think when making your decision is that the private insurance is a flat fee no matter how much you make BUT as you get older the private insurance premiums will steadily go up until it reaches the point where its cheaper to pay into the Japanese Health System.

For other “How to … in Japan” guides, try these:

Big In Japan Japanese Bicycles Jail Making friends in Japan hostess in Japan
How to become big in Japan How to cycle in Japan How to survive getting arrested in Japan Making Friends in Japan How not to be a hostess