Health care cheaters in Japan’s expat community out in force

I recently came upon this:

Free Choice Foundation of Japan

This is a protest group of expatriates in Japan, that was recently set up to organize against Japan enforcing the National Health Insurance law against resident expats here.

The fundamentals of this story are simple:

In Japan, everyone who is resident is either supposed to be enrolled in the National Health Insurance (kokumin kenko hoken) or a company plan that is highly regulated by the government, through Social Insurance (shakai hoken).

Apparently, for many years, the prior government used to look the other way as to whether non-Japanese resident in Japan were enrolled in one or the other. As so as a result, a market developed where explicit “gap insurers” (companies offering on-its-face coverage for a certain amount of medical bills) could sell to the expat community without incurring any questioning by the regulators.

The expat insurers maintained that their insurance was only “gap”. (This means it was only meant to cover the 30% or so that the Japanese progam doesn’t cover.) But they never wrote the kind of contract like you see in America where the insurance company insists that the other purported coverages pay before they themselves will pay!

For example, in America, if Aetna knows that Cigna is required to pay first, then Aetna will not pay anything until it finds out that Cigna paid its share!

But the expat Japanese gap insurers play a little game. And that is, they don’t care if the government paid or not, they simply price the gap insurance as if the government isn’t expected to pay. They say, 2,000,000 yen of coverage for “x” amount. Whether the government program pays or not is irrelevant in that equation. (And when I say government program, I include shakai hoken employer-based programs because they are under the similar regulation.)

You can be a valid Japanese insurance company for gap insurance, as I understand it. This means, you can write a policy to pay on the 30% that the government won’t insure for health care. But the assumption is that everyone who is resident here is in a program of government-regulated health insurance.

So the loophole that is exploited, is that the prior government never questioned the costs and actual coverage of the gap policies written by Viva Vida, InterGlobal, Global Health, etc.

If the gap insurers were required to be secondary coverage in the presence of primary coverage by a government system, the game would end.

Fact is, as I explain at, is that the gap insurers have been conspiring (not sure if it’s criminal in Japan or not, maybe a civil penalty) to entice resident expats to evade their duty to enroll in National Health Insurance. Plain English. Bottom line.

[The Japanese health insurance system is based on payment by a progressive income scale. It is part premium, part progressive tax. So anyone coming along paying a lower price than what the Japanese have to pay at the same income level is in effect a cheater.]

They say things like, “well there are many reeeeeee-asons why expats in Japan arennnnnnn’t enrolled in National Health Insurance!” But the reasons are all illegal.

Maybe an example will suffice: suppose bank robbery were a little more common in Japan. Not the rarity like now. And the loss to the banks was not big enough to be a crisis. Maybe shareholders, workers, interest-earners had to take a little more of a hit. But not a crisis.

Suppose also that bank robbers fail the most times because they don’t have a getaway car waiting out front. Without the getaway car, they usually end up paying a price for their criminal behavior.

So along comes a company. Let’s call it Vroom Vroom. And what Vroom Vroom says is that they will by chance provide a car for rent to anyone who needs to get out of a location fast! They say, “there are many reasons why you might want to get away from some place fast! Let Vroom Vroom offer you the car you need for just that special occasion.”

And so the bank robbers—who in their mind really aren’t doing anything wrong, since the bank system seems to be working just fine even if they take a little every now and then—catch on that they can make it much easier for themselves if they pay for the service charged by Vroom Vroom company.

After a while, maybe, it becomes clear that the only people who want Vroom Vroom’s rental cars are those who are looking to flee the scene of a bank robbery that they committed! But Vroom Vroom says, “no one should rob banks! We are just a service for people who want to get away from a location fast!”

How far off is the current health insurance payment evasion in Japan from that example? Hum????