The Drawbacks of Japanese National Health Insurance And Why You Should Get Private Health Insurance in Japan

private health insurance for people living in japan

With one of the highest life expectancies in the world, Japan is often lauded for its universal healthcare coverage. Given the ease of finding medical treatment within this system, many people think that having private health insurance in Japan isn’t necessary. If this is you, however, you may want to think again. Any system has weak points. There is a reason that many foreign residents in Japan still buy private health insurance cover. Are you sure that you can count on the public Japanese healthcare system to cover you in any situation?

The Drawbacks of Japanese National Health Insurance – And Why You Should Get Private Health Insurance in Japan

Japan’s National Health Care System

Japan’s National Health Care System, or “kaihoken,” is a universal model providing comprehensive coverage to all citizens. It operates through a combination of employee-based and community-based health insurance schemes. 

Established in 1961, the system requires everyone to have health insurance either through their employer or the National Health Insurance (NHI) program. The program is characterized by a fee-for-service model in which patients pay 30% of medical costs, while insurance covers the remaining 70%. 

This approach ensures affordability and accessibility for all citizens. With a focus on preventive care and regular check-ups, it contributes to Japan’s overall health and longevity. However, there are gaps in the Japan’s NHI program that only private health insurance can fill.

smart money quiz small

The Weaknesses And Limitations Of National Health Care In Japan

While Japan’s national health care system has made great strides in ensuring accessibility and affordability, there are certain limitations that come with such a system. Some of the weak points of the universal healthcare system include: The Weaknesses And Limitations Of National Health Care In Japan

  • -Limited treatment options: National healthcare systems may restrict the range of treatments available to patients due to budgetary constraints and cost considerations. As a result, some effective or specialized treatments might not be covered under the system.
  • -Cost as a major factor: The need to contain costs and efficiently allocate resources is a significant concern for national healthcare systems. The high costs associated with cutting-edge treatments can strain budgets, which may lead to the exclusion of these therapies from the approved list.
  • -Access to modern and effective treatments: Patients relying on national health care will find that they can only access approved treatments, which might not always include the most modern or effective options. This limitation can be particularly challenging for individuals with complex or rare conditions or morbidity illnesses that require specialized care. In these cases, any small increase in the effectiveness of the treatment or medicine increases the chance of survival for the patient.
  • -Impact on innovation and development: The focus on cost containment and budget management may hinder the adoption of innovative treatments or technologies, as the expenses associated with research, development, and implementation could be deemed too high for the national healthcare system to bear.

Benefits of Private Medical Insurance In Japan

Benefits of Private Medical Insurance In Japan Given the shortcomings of the National healthcare system in Japan, private medical insurance serves as a complement to national healthcare systems, offering patients additional options and benefits. Some of the advantages of private medical, and critical illness insurance include:

  • -Access to top surgeons and specialists: Private insurance provides the flexibility to seek out the best medical professionals worldwide, ensuring that patients receive the highest quality care, regardless of location.
  • -Treatment in a familiar language: Private medical insurance can facilitate treatment in a patient’s native language, reducing potential communication barriers and enhancing the overall care experience.
  • -Cash payouts upon diagnosis: In certain cases, private insurance policies offer lump sum payments upon diagnosis of specific conditions, providing financial support during challenging times and allowing patients to focus on their health and recovery.

These benefits, among others, make private medical insurance an attractive option for those who want greater control over their healthcare choices and additional financial security.

Subsidizing Japanese National Health Care With An Internationally Portable Private Critical Illness Insurance Plan

By subsidizing national healthcare with critical illness plans, you can circumvent the limitations of public healthcare, creating a more robust and tailored approach to managing their healthcare needs and expenses.

Critical illness plans are specialized insurance policies designed to provide financial support to individuals diagnosed with a large range of diseases, conditions, and syndromes. These include cancer, heart attack, blindness, permanent disability, or strokes. These policies typically offer lump-sum payments upon diagnosis, which can be used to cover treatment costs, replace lost income, or manage other expenses related to the illness.

how much life insurance should I have for my family?

Many people who move to Japan choose to supplement their national health care coverage with private critical illness insurance for several reasons:

  • -Portability: Critical illness plans are not tied to employment, making them portable and allowing individuals to maintain coverage even when changing jobs or during periods of unemployment.
  • -Low cost: Compared to comprehensive private health insurance, critical illness plans usually have lower premiums, making them a more cost-effective way to supplement national health care coverage.
  • -Complementary coverage: National health insurance (NHI) typically covers routine medical expenses and smaller treatments, while critical illness plans provide financial support for major illnesses. Combining the two can ensure comprehensive protection against a wide range of health-related costs.

Consulting a financial adviser can help you better understand your insurance options and the best plan for your individual goals and circumstances. There are many types of insurance and healthcare, and navigating the options can be confusing. An expert can help simplify the process and provide tailored advice based on your unique needs, financial situation, and long-term goals.

Book A Free Introduction Call

Learn More About Working Together

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
free consultation with financial adviser in japan

Sources and Further Reading