JANUARY

The Japanese Health Care System, 2015
Ryozo Matsuda
College of Social Sciences, Ritsumeikan University, Kyoto
What is the role of government?
Government regulates nearly all aspects of the universal public health insurance system (PHIS). The national and
local governments are required by law to ensure a system that efficiently provides good-quality and well-suited
medical care to the nation. National government sets the fee schedule and gives subsidies to local
governments, insurers, and providers. It also establishes and enforces detailed regulations for insurers and
providers. Japan’s 47 prefectures (regions) implement those regulations and develop regional health care
delivery with funds allocated by the national government. More than 1,700 municipalities operate components
of the PHIS and long-term care insurance and organize health promotion activities for their residents (Tatara and
Okamoto, 2009).
Who is covered and how is insurance financed?
Publicly financed health insurance: The PHIS, comprising more than 3,400 insurers, provides universal primary
coverage (National Institute of Population and Social Security Research, 2014). In 2013, estimated total health
expenditure amounted to approximately 10 percent of GDP, 83 percent of which was publicly financed, mainly
through the PHIS (OECD, 2015). Within the PHIS, premiums, tax-financed subsidies, and user charges
accounted for about 49 percent, 38 percent, and 12 percent of the sum of health expenditures, respectively
(MHLW, 2014b).
Citizens are mandated to enroll in one of the PHIS plans based on employment status and/or place of
residence, as are resident noncitizens; undocumented immigrants and visitors are not covered. Insurance
premiums and the basis upon which they are charged vary between types of insurance funds and municipalities.
Government employees are covered by their own insurers (known as Mutual Aid Societies), as are some groups
of professionals (e.g., doctors in private practice). Those who fail to keep up their enrollment must pay up to
two years’ worth of premiums when they reenter the system. Means-tested public assistance covers health care
for its recipients. Citizens and resident noncitizens enrolled in the PHIS age 40 and over are mandatorily
enrolled in long-term care insurance.
Private health insurance: Although the majority of the population holds some form of medical insurance,
private insurance plays only a minor supplementary or complementary role. It developed historically as a
supplement to life insurance and provides additional income in case of sickness, mainly in the form of lump-sum
payments when insured persons are hospitalized or diagnosed with cancer or another specified chronic disease,
or through payment of daily amounts during hospitalization over a defined period. Since the early 2000s, the
number of standalone medical insurance policies has increased (Japan Institute of Life Insurance, 2013; Life
Insurance Association of Japan, 2014).
Part of an individual’s life insurance premium (up to JPY40,000, or USD380) can be deducted from taxable
income. Small discounts can be applied to those employees whose employers have collective contracts with
insurance companies. Both for-profit and nonprofit organizations operate private health insurance.
The provision of privately funded health care has been limited to services such as dental orthodontics,
expensive artificial teeth, and treatment of traffic accident injuries (although treatment of these injuries is usually
paid for by compulsory or voluntary automobile insurance.)
International Profiles of Health Care Systems, 2015 107