Health Insurance Guide #2: National Health Insurance

Welcome to the second part of our (weekly) comprehensive health insurance guide. 

In this section, we will be looking at the fundamentals of the National Health Insurance (kokumin kenko hoken 国民健康保険 or simply "NHI"); specifically eligibility, costs and benefits.

National Health Insurance is the basic plan for all of those who are not elegible for the employee health system (which will we cover in the next section). Unlike some developed countries, it is not "free" (i.e. funded by general taxation) but rather paid by a seperate tax based on income.

Although it is referred to as "national insurance" the system is actually very much run locally, with the prefectural governments helping out. The national government issues grants to cover cost deficit, although these have been shrinking in recent years.

NHI is separate from Advanced Age Insurance (後期高齢者医療保険 koki koreisha iryo hoken) which is a relatively new, separate system for senior citizens 75 and older (65 and older if disabled) that covers costs 90 percent of medical expenses. This system will likely not effect most of our readers although you will find yourself paying an extra fee to help out your elderly neighbours. 

Benefits

NHI covers all essential treatment, surgeries, and dental. However it does not cover check-ups, vaccinations, child birth, abortions, elective procedures (i.e. braces, cosmetic surgery), and extras like private hospital rooms.

Having an insurance provider not cover check-ups may seem odd but keep in mind that Japanese schools and work have extremely extensive yearly (usually free) health checks. In addition, municipalities generally offer extras such as vaccination clinics, special check ups for children, and so on. There are also vouchers available for special health checks and cancer screening for those over 40. 

Pregnancy costs are covered in the form of a lump sum reimbursement (shussan ikuji-kin 出産育児金) of around 420,000 yen. This lump sum does not change regardless of the cost incurred by the hospital stay (which can vary by location, doctor, and optional costs) so it is possible to come out of a pregnancy with extra cash or even a net loss. Some hospitals have systems in place where in the money will be sent directly from the NHI provider to the hospital while others demand upfront payments.

Eligibility

Despite being a "compulsory system," there is no automatic enrolment. You should do so yourself at the town hall or ward office (see part 1 of this guide for details).

 

You are eligible for NHI under the following circumstances:

• You are self employed or the sole proprietor of a business
• You run or work in a business employing 5 people or less
• You work part-time, temp work, and/or dispatch work (less than 3/4ths the amount of time a full time employee would work is considered part time)
• You work in farming, agriculture, or fisheries and are not eligible for agriculture or fishery cooperative insurance
• You work in designated service industries or as an outside contractor
• You are unemployed
• You are a student

NHI extends to children and spouses so long as they do not make over 1,300,000 yen a year and/or have his or her own health insurance policy available through work.

Cost

The exact costs of NHI vary significantly from prefecture to prefecture, and even town to town. The costs are adjusted at the end of every tax year (March) and are based on your previous year's income. For this reason, many who have just arrived in Japan will be shocked to find how cheap their insurance is the first year only to find a massive spike in their NHI tax the following tax year. 

Although costs differ, there is a standard formula in use that just about every NHI system uses. 

Medical Care Portion + Senior Citizens Support Fee + Long-Term Care Insurance = (Total Cost x Fee Reduction Percentage) 

• The medical care portion consists of the following formula (Basic Fee x Number of Insurees) + (Basic Levy for All Members x Fixed Percentage). There is a maximum limit of about 500,000 yen for this portion.
• Basic Fee and Number of Insurees refers to a fixed price, usually in the 30,000 yen or more range set by the city. This is multiplied by the number of immediate family members on your NHI.
• Basic Levy is calculated by taking your previous years' household income minus 330,000 yen.
• Senior Citizen Support Fee is the section that goes toward the aforementioned Advanced Age Insurance and is calculated as (Basic Levy x Number of Insurees) + (Basic Levy x Fixed Percentage). There is a maximum of approximately 130,000 yen for this portion.
• Long Term Care Insurance supports nursing care for the elderly but it is only paid by those 40 to 64 years old and is calculated as (Fixed Fee x Basic Levy for Insurees 40 to 64 years old) + (Basic Levy for Insurees 40 to 64 years old x Fixed Percentage). There is a maximum of approximately 100,000 yen for this section. 

There are deductions available for those who are unemployed, below a certain income threshold, have young children, or cannot work. The most common deductions are for low-income earners, students, the recently unemployeed, and the disabled. The Fee Reduction Percentage is generally in the range of 20 to 70 percent. Consult your local town hall for details.

You are liable for payments from the first day of eligibility (i.e. the first day you arrive in Japan) for a maximum of 2 years back payments. So if you fail to sign up after getting your alien registration then you are technically liable for all the back payments up to the day you change your mind and decide to join. Late payments will invalidate your coverage (although not immediately) and many city halls won't allow you to join late if all the back payments are not paid in full.

Finally, don't forget to submit your earning and withholding (gensen choshu shomeisho 源泉徴収証明書) statement during tax time (February-March). Reporting your income or lack thereof is particularly important for students with part time work since they are generally entitled to a hefty discount. Unemployed should similar report a continued lack of income in order to get reduction benefits.

Out-of-Pocket Costs

As we have covered previously, you are responsible for 30 percent of all medical expenses. Children under six only need to pay 20 percent. There is a maximum out-of-pocket expenditure limit (kogaku iryo-hi 高額医療費) of 80,100 yen plus 1 percent of any portion exceeding 267,000 of total medical costs for treatments occurring up to 3 times in a month. For treatments that occur over 4 times a year there is a cap of 83,400 yen. This maximum amounts are higher for those taxed as "high income" and lower for citizens 75 and older and/or those who are exempt from local residence taxes.

Any money paid over the maximum cap is returned in a reimbursement from your city hall. 

If you lack the means to pay for your immediate out-of-pocket expenses, many providers will use a temporary loan (kashitsuke seido 貸付制度) or a charge payment system (inin-barai seido 委任払制度) wherein you arrange for the local NHI system to receive the excess payments directly. Consult your medical provider and local town hall to see if there are any such arrangements in place.

More

• Since NHI is administered on a local level, you must register your address at the city hall. Also, if you change or renew your residence status, make sure to report it to the city hall.
• Once you are in, you generally cannot leave the NHI unless you leave the country. In this author's experience, simply telling city hall that you plan to move to another prefecture is generally enough for you to get out of the system although not every city hall is that forgiving. Some prefectures may require proof of having moved or even a copy of plane tickets home before they let you go. It all is on a "case-by-case" basis, it would seem. For all intents and purposes, don't assume that leaving the system will be an easy task short of leaving Japan.
• Finally, if you get a job that provides health insurance under one of the Employee Health Insurance schemes then you need to show your new proof of insurance to city hall before they let your out of the system.
• Since fees are generally paid in installments, you may be entitled to a reimbursement after you quit the local system (i.e. move to a different municipality). For example, if you move prefectures at the end of the month, you will be liable for the whole month's payment in your previous prefecture in addition to any payments in your new location, but you will receive a reimbursement for the days in which you were not covered.

As you can see, the whole NHI system is more than a bit complex. Welcome to Japan. Check back soon for our next section where we will cover the Employee Insurance System.

Other posts in this series

• The Fundamentals [part 1] [part 2]
• National Health Insurance
• Employee Health Insurance
• Optional Insurance
• Do I need Insurance at all?