JANUARY

JAPAN
What is covered?
Services: All PHIS plans provide the same benefits package, which is determined by the national government,
usually following a decision by the Central Social Insurance Medical Council, a governmental body. The package
covers hospital, primary, and specialist ambulatory and mental health care, approved prescription drugs, home
care services by medical institutions, hospice care, physiotherapy, and most dental care. It does not cover
corrective lenses unless recommended by physicians for children under age 9, or optometry services provided
by nonphysicians. Home care services by nonmedical institutions are covered by long-term care insurance.
Preventive measures, including screening, health education, and counseling, are covered by health insurance
plans, while cancer screenings are delivered by municipalities.
Cost-sharing and out-of-pocket spending: All enrollees have to pay a 30 percent coinsurance rate for services
and goods received, except for children under age 3 (20%), adults between 70 and 74 with lower incomes
(20%), and those 75 and over with lower incomes (10%). There are no deductibles. Annual expenditures on
health services and goods, including copayments and payments for balance billing and over-the-counter drugs,
between JPY100,000 (USD 950) and JPY2 million (USD19,000) can be deducted from taxable income. 1 In 2012,
out-of-pocket payments for cost-sharing accounted for 14 percent of total health expenditures (OECD, 2015).
Some employer-based health insurance plans offer reduced cost-sharing. Providers are prohibited from charging
extra fees except for some services specified by the Ministry of Health, Labor and Welfare, including amenity
beds, experimental treatments, the outpatient services of large multispecialty hospitals, after-hours services, and
hospitalizations of 180 days or more.
Safety net: Catastrophic coverage stipulates a monthly out-of-pocket threshold, which varies according to
enrollee age and income—for example, JPY80,100 (USD761) for people under age 70 with an average income;
above this threshold, 1 percent coinsurance applies. There is a ceiling for low-income people, who do not pay
more than JPY35,400 (USD336) a month. Subsidies (mostly restricted to low-income households) reduce the
burden of cost-sharing for people with disabilities, mental illness, and specified chronic conditions. There is an
annual household health and long-term care out-of-pocket payments ceiling, which varies between JPY340,000
(USD3,230) and JPY1.26 million (USD11,970) per enrollee according to income and age, above which such
payments can be reimbursed. Enrollees with employer-based insurance who are on parental leave are exempt
from payment of premiums. Enrollees in Citizens Health Insurance (for the unemployed, self-employed, and
retired, and those others under 75) with low income and those with moderate income who face sharp, unexpected
income reductions are eligible for reduced premium payments. Reduced coinsurance rates apply to patients with
306 designated long-term diseases, varying by income, when using designated health care providers.
How is the delivery system organized and financed?
Primary care: Primary care is provided at most clinics and some hospital outpatient departments. Primary care
and specialist care are not regarded as distinct disciplines, although it has been argued that they should be.
Approximately one-third of physicians are salaried employees of clinics, and virtually all others are selfemployed.
Clinics are often owned by physicians or by medical corporations (special legal entities for health
care management, usually controlled by physicians, that own hospitals as well as clinics), but sometimes by local
governments or public agencies.
Primary care practices typically include teams with a physician and a few employed nurses. In 2011, the average
clinic had 7.2 full-time-equivalent workers, including 1.2 physicians, 1.8 nurses, and 2.1 clerks. 2 Clinics can
dispense medication (which doctors can provide directly to patients). Use of pharmacists, however, has been
growing; 67 percent of prescriptions were filled at pharmacies in 2013 (Japan Pharmaceutical Association,
2014). Patients are not required to register with a practice, and there is no strict gatekeeping, although
government encourages patients to choose their family doctors, and there are patient disincentives for
1
2
Please note that, throughout this profile, all figures in USD were converted from JPY at a rate of about JPY105 per USD,
the purchasing power parity conversion rate for GDP in 2014 reported by OECD (2015b) for Japan.
The figures are calculated from statistics of the Ministry of Health, Labor and Welfare (2012a).
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The Commonwealth Fund