Why you want to sign up for Japanese health insurance.

I am not even going to put a “part number” on this one, since it’s at least number ten.

Whenever I blog about the issue, I notice I get this up-tick in hits. I dunno! What, do you people have me tagged for the one issue in Google Reader or something? How do I trigger that? By category?

Anyway.

Last year, when that whole Free Choice Japan thing was going strong, I mentioned about two major trends:

1) The new DPJ government coming in, which has happened;

and

2) The new Zairyu card.

I want to now add a third:

3) American regulation of “mini med” policies starting on January 1, 2011; with the inevitable requirement to have a real policy of coverage by January 1, 2014.

Your own country might have some different arrangement, and you might be able to work some kind of coverage as gap. I am mostly writing for Americans, or at least that’s my assumption.

[UPDATE: But, as Reader “Ken44” points out, and I elaborate below, there is an exemption available to you if you can prove either of the Section 911 “physical presence test” or the “bona fide resident test”. Since most overseas Americans forget to file a U.S. tax return, good luck with that one. Plus, at the outset, you don’t know how long you might stay in Japan. If you fail to meet the test, you’d still be hit for the $695.]

Now, here’s what you have: inevitably, the Minshuto government is going to reform health care coverage in Japan. Here, the reform is probably going to be that everyone goes into regional exchanges. The separate kosei kenko hoken plans [in the various industries] will get nationalized into the local-government run kokumin kenko hoken (since one group has all the surplus money and the other has perennial deficits), and this notion of falling through the cracks (like with the pension) is just going to be less acceptable.

This is going to happen for the Japanese, which means it’s going to happen for you.

When the current Alien Registration Card disappears in a few short years, there will be the replacement “Zairyu Card”. The government has already said that it is going to track things like health care and pension enrollment on it. Well, if you’re not enrolled, guess what?

And now, finally, for Americans: the federal government is going to have you certify on the 1040 that you have the medical coverage. Forget about this non-filer game that goes on overseas–they’re targeting that, too, and I’ll put up a link when I get a chance. The penalty for not having the insurance will go to $695, (which incidentally, is more than it costs for the first year coverage in kokumin kenko hoken.) There is no criminal penalty for not having the insurance. (There IS a criminal penalty for not filing a required tax return, by the way!)

So at some point in the future, it means two governments are going to be asking about whether you are covered or are free riding the system.

So in a few short years, it will look like this:

1) Shakai hoken gone, replaced by mandatory health coverages that aren’t work-based, and a pension system that my guess is will look like Canada’s;

2) A new gaijin card that is going to tie to a database showing that you are in the right health care coverage;

3) the U.S. government asking you if you have your health insurance, where the gap policy will not work as a “yes”.

So if these three are on the horizon, wouldn’t you want to have your ducks in a row now? Especially, when you consider that the Japanese can always back-enroll you and stick you with a huge bill?

12 thoughts on “Why you want to sign up for Japanese health insurance.

  1. “kosei kenko hoken”

    Are you sure about that terminology? It is the first I have heard of it.

    I think you mean “kanshou kenko hoken” 管掌健康保険

    I haven’t heard about them merging it with “kokumin kenko hoken” either.

    There has been talk of merging the two NENKIN systems (“kokumin” and “kousei”) which I am a bit concerned about how that will affect whatever benefits I might anticipate several years down the line.

    Nenkin and Kenkou Hoken are still apparently run by two separate agencies as far as I can work out.

      1. Of course, in the 2010 Manifesto (page 13 of the PDF), there is no mention of that particular health care proposal, although a lot of language in it still indicates that there will be reforms to increase the compensation to medical service providers. This can only be done one way: money. From the kenko hokens that are part of Shakai Hoken, and by enforcing mandatory coverage.

        1. Yeah, it looks like they dropped that particular clause from 2009 in the 2010 version and replaced it with a bunch of provisions to try to fix the “oops” all over the nenkin system.

          But if they still want to merge it, I wonder about what they intend to do about all the legitimate health care kumi-ais that aren’t under direct governmental care? I don’t see them nationalising those.

          1. I have a feeling that the solution now is going to be some sort of levy on the company plans, in order to provide more money to the medical and long-term care practitioners.

            They don’t have to do a total nationalization. They simply can take whatever is in surplus and say there is a 35% tax on it. They would use that money to cover local government plan deficits and to provide better pay to health care workers.

            The main point is that the idea that people are going to be able to float free of the system (until they need it) is going to become much more controversial, let’s say.

  2. That doesn’t sound like a good thing. The number of kumi-ai has slowly been decreasing year on year due to cost over runs etc. Having the government tax them a bit more would only hasten their demise.

    When I joined, my current company used “seifu kansho kenko hoken” (i.e. salaryman kokumin kenko hoken.) A few years ago, we joined a kumi-ai which dropped our insurance costs by quite a bit. Even with a recent rise in rates by the kumi-ai, we are still cheaper than the state sponsored version. Plus, kumi-ai have a lot of “perks” besides lower cost: discounts on various holiday spots, cheap Disneyland tickets (as a way of getting people to get out and walk about) etc. I would hate to have that go away even if I don’t use all of it.

    1. Agreed re the smaller associations, but some of the larger ones are just giant slush funds.

      I am concerned why spas, health clubs and especially get-away resorts should receive tax-free subsidies from the government. My walking shoes don’t. (Plus, they have a import duty imposed on them!)

  3. — The penalty for not having the insurance will go to $695—-

    1. Health Bills–no fines for Americans abroad
    http://www.aca.ch/joomla/index.php?option=com_content&task=view&id=352&Itemid=2

    2. No one knows the future of Obamacare. Given the more Americans learn the more they disapprove I suspect there will be many changes made before 2014.

    —-inevitably, the Minshuto government is going to reform health care coverage in Japan.—

    LOL! Yeah, right.

    —-So if these three are on the horizon, wouldn’t you want to have your ducks in a row now? —-

    No, because you don`t know what`s going to happen and once they`ve (NHI /J-pension) get their hooks in you it`s hard to get them out.

    —-Especially, when you consider that the Japanese can always back-enroll you and stick you with a huge bill—

    The huge bill is not all that much more than what you would have paid had you actually enrolled. So why pay unless you want to? Plenty of Japanese don`t.

    1. Ken, no offense to the American Citizens Abroad (ACA) group in Switzerland, but I know there were a number of amendments put to Section 1501 of the Affordable Care Act (also ACA). When I read through the act, it didn’t appear to me that there was an exemption for a U.S. citizen living abroad. However, the final, enacted bill looks like it has this part of Section 1501, relating to a change in the tax code, a new Section 5000A(f)(4):

      (4) Individuals residing outside United States or residents of territories.–Any applicable individual shall be treated as having minimum essential coverage for any month–

      “(A) if such month occurs during any period described in subparagraph (A) or (B) of section 911(d)(1) which is applicable to the individual, or

      “(B) if such individual is a bona fide resident of any possession of the United States (as determined under section 937(a)) for such month.

      This is statute and tax-speak for saying that if you are outside America in a way that you would qualify for the Foreign Earned Income Exclusion by either the 330-day rule (“physical presence test“) or maintaining a residence outside of America (“bona fide residence test“), you do not have to certify to Minimum Essential Coverage.

      So you are technically right, that if you stay outside of America and can prove so through either the “physical presence test” or “bona fide resident test” of Section 911, you can claim an exemption from the penalty. The problem is that most citizens outside of America don’t file at all, and so it’s not really clear to me how these people are going to prove that they had one of those exemptions. Maybe the passport will do it.

      And certainly–which is my main point–for some reason you come to Japan and don’t stay long enough to meet either of the Section 911 tests, you DON’T get the exemption and you get hit for $695. So the wisest course is to sign up for the proper Japanese insurance and not play games with gap.

      With regards to the Minshuto health care policies, it doesn’t seem to me that the favorite odds are on “no change”. I’d say the odds are in favor of enforced mandatory coverage at some point in the near future. I could see an exemption from payment for low-income people. I think they want to tackle the over Age 75 program first.

      You say to people: run the risk because if you get caught, you just have to pay what you didn’t. But that isn’t right, is it? You end up paying all the money you paid to the gap insurer, plus what you should have paid to the Japanese in the bona fide system.

      You are better off enrolling in the Japanese system and taking your chances there, like as you say, the Japanese do.

  4. —So you are technically right, that if you stay outside of America and can prove so through either the “physical presence test” or “bona fide resident test” of Section 911, you can claim an exemption from the penalty. The problem is that most citizens outside of America don’t file at all, and so it’s not really clear to me how these people are going to prove that they had one of those exemptions.—

    I am not “technically right” I am correct. If you are an Americans living and working in in Japan and qualify under the physical presence test/residence test you do not have to certify minimum essential coverage. The fact that there are Americans who do qualify yet don`t file is their own fault.


    —You say to people: run the risk because if you get caught, you just have to pay what you didn’t. But that isn’t right, is it? You end up paying all the money you paid to the gap insurer, plus what you should have paid to the Japanese in the bona fide system.—

    Who says you need to pay for the gap insurance? I don`t pay for either. If I get sick and need serious medial attention I`ll join the NHI and pay what they say I owe and still come out way ahead. Now if I had a family of course I`d be enrolled by I don`t so fuxk it. Imo, this is what we`re going to see with Obamacare as well since for many it`s cheaper t0 pay the yearly penalty then to actually join.

    —ih regards to the Minshuto health care policies, it doesn’t seem to me that the favorite odds are on “no change”. I’d say the odds are in favor of enforced mandatory coverage at some point in the near future. —

    To suggest the “odds favor” enforced madatory coverage is more wishful thinking on your part than anything else. Bottom line: If you don`t want to pay into the Japanese health system then don`t. There is little to worry about unless of course you actually need to use it.

    1. Chuckers Ken says,

      I am not “technically right” I am correct. If you are an Americans living and working in in Japan and qualify under the physical presence test/residence test you do not have to certify minimum essential coverage. The fact that there are Americans who do qualify yet don`t file is their own fault.

      No, you are just technically right. The Swiss group is misleading. The statute doesn’t say that if you’re out of the country, you get the exemption. The statute says that if you are not resident and meet one of the tests of Section 911, you can claim an exemption from Minimum Essential Coverage.

      You noticed, I put a special note upstairs. So it still remains, that if someone American doesn’t know their future in Japan (which most 1st year people don’t), it’s better to sign up.

      Who says you need to pay for the gap insurance? I don`t pay for either. If I get sick and need serious medial attention I`ll join the NHI and pay what they say I owe and still come out way ahead. Now if I had a family of course I`d be enrolled by. I don`t so f**k it. Imo, this is what we`re going to see with Obamacare as well since for many it`s cheaper t0 pay the yearly penalty then to actually join.

      OK, so this is just “see if they catch you”, which has probably been going on since Mesopotamian times.

      What happens if you get a family?

      To suggest the “odds favor” enforced mandatory coverage is more wishful thinking on your part than anything else. Bottom line: If you don`t want to pay into the Japanese health system then don`t. There is little to worry about unless of course you actually need to use it.

      Ken, it’s my reading of the tea leaves. Once the Shakai Hoken is split out, and the Zairyu Card comes in, there is going to be a blank data cell in someone’s screen. If some boss is saying, “fill it in”, what do you think is going to happen?

      This doesn’t even go to the problems Japan has under the Totalization treaties.

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