I’ve got this gap insurance puzzle on my mind again.
I mentioned how Global Health has come out with a new Top-Up policy for expats here in Japan.
Readers know that I have been discussing how some people here try to get around the requirement that everyone who is a resident in Japan basically get either Japanese National Health Insurance or the Employers’ Health Insurance (kousei kenko hoken) piece of Social Insurance.
A few days ago, I noticed that Global Health has moved into the market for what is commonly called gap insurance. They are willing to cover you, for a fee, for those things that the regular Japanese insurance won’t pay. These are the things that Ronald Kessler’s Free Choice Foundation is making such a big issue about on the net and in print media.
I discussed what the gap policy costs a very little bit. What I didn’t do is try to figure out what the “missing link” costs.
Global Health, with the Top-Up plan, will let me buy these coverages. (Restrictions apply.)
$250 USD – for gap coverage up to $50,000 USD (Pays what Japanese system won’t pay. There is a small deductible and the cap at international clinics is $500.)
$170 USD – travel insurance (Global Health will cover you overseas, up to $1,700,000. I don’t know if VivaVida! caps this as well, but I’ll assume they don’t.)
I am going to add $84. From an earlier post, this is the price the American CPA association quotes a 44-year-old male on $100,000 coverage.
So total cost: $504.
On the other hand, Viva Vida!, the insurance company I love to use as an example because they are the hardest to pin down about what they are actually doing, will charge me 56,700 yen a year ($630 at approx 90 JPY/USD) for this:
$632 – blanket health care coverage (restrictions apply) up to 2,000,000 yen ($21,739.13 USD). I am assuming, above, no significant cap on foreign travel health expenses, plus you get a term-life policy of 10,000,000 yen ($108,695.65).
You see I have to add the Life in to get any sort of closely workable comparison with the Global Health one.
We know that Japanese health insurance contains a catastrophic coverage, so that once your expenses reach a certain amount, the kenko hoken covers 100%, not 30%. So the Global Health $50,000 “cap” is maybe something you won’t likely reach. So then, we will assume that the price Global Health would charge you for the same cap as Viva Vida! would be the same price Global charges you for its higher cap–$250.
So each policy, as I’ve reconstructed it, is similar in the kinds of areas each is covering.
VivaVida! costs $128 more.
This $128, purportedly, is the cost to insure the difference between paying out 30% (Global Top-Up), and paying out 100% up to that 2,000,000 yen Vida cap.
Do you see? Each piece of the coverage closely matches, unless you want to argue about what VivaVida! is covering overseas.
But VivaVida! prices the Japanese kenko hoken substitute at a mere $128, (estimated).
So what is going on? The gap policy almost costs what the full coverage costs (up to 2,000,000 yen).
Here’s what I think is going on: The Japanese kenko hoken at the Ward Office is the ultimate coverer of any large health insurance expenses. Because it’s pretty clear—especially if a hospital charges 150% of ordinary costs to anyone without real insurance coverage—that an unexpected bill can get big, fast.
You make a $6,000 bill, you start worrying. You’re only covered up to $20,000 or so. What if there’s more charges coming?? Probably the insurer reminds you of it even, to put the itch in your pants to get moving into real health insurance. “Hey, we support the way you want to arrange your life for your special neeeeeeeeds! But you know, it only goes so far!”
So the privately insured person goes running back to the government system (that is, to the rest of us!) Now, the game becomes “who should have told us that we were supposed to be in this good comprehensive government program from the very beginning?!!!”. And its varients.
I know that some foreigners here are legitimately turned away by Japanese municipal bureaucrats. I know. I know. It’s a shame, because that even gives the con artists out there the plausible deniability that there was some mistake in the beginning. After they start drowning in health care bills.
Coming up with these sophisticated ways around things, to me, seems like time better spent just doing things right. I know when I have seen that special handful of Japanese I’ve come across go at it, I start to wonder if it was an Edo party game during the bakufu.
So what I want to know is: Unless one or the other company has really put a price in there that’s way out of whack, who pays the missing coverage? Us, right?