Why Does Japan's Health Insurance Feel So Expensive? Comparing Japan and Korea's Healthcare Systems

The first time I looked closely at my Japanese payslip, I spent more time reading the deductions than the salary itself.

There was income tax, resident tax, pension contributions, and health insurance. Later, long-term care insurance would also become part of the monthly deductions.

My first thought was simple:

"Living in Japan costs more than I expected."

Since I grew up in Korea, I naturally compared the two countries. Both have national health insurance systems, yet Japan somehow felt more expensive. I wanted to understand whether that feeling matched reality or whether I simply wasn't familiar with how the Japanese system worked.

After reading about both healthcare systems, I realized the answer was more nuanced than I expected.

How Japan's Health Insurance System Works

Japan has a universal health insurance system, which means everyone is expected to be covered through either employee health insurance or the National Health Insurance program.

The system is funded through insurance premiums together with public funding, allowing patients to pay only part of their medical costs when receiving treatment.

For most people, this means paying a percentage of the medical bill rather than the full amount.

When I first moved to Japan, I simply knew I had to pay health insurance every month. I didn't really understand what those payments were supporting until much later.

Japan and Korea Are More Similar Than I Expected

Before comparing the two countries, I assumed Japan's system was completely different.

In reality, they share many similarities.

In both Japan and Korea:

• Most residents are covered by a national healthcare system.

• Insurance premiums help fund medical services.

• Patients usually pay only part of the treatment cost.

• The government plays an important role in supporting healthcare.

That was one of the biggest surprises for me.

The basic idea is actually very similar. The differences become more noticeable when you look at demographics, healthcare costs, and how each country finances the system.

Why Japan Can Feel More Expensive

After living in Japan for years, I think there are several reasons many people feel this way.

The first is simply visibility.

Health insurance appears as a separate deduction on most payslips. When it sits alongside pension contributions and resident tax, the total amount can seem surprisingly high.

The second reason is Japan's aging population.

Japan became a super-aged society earlier than many other countries. As people live longer, healthcare spending naturally increases because more people need regular treatment, medication, rehabilitation, and long-term care.

Supporting an older population requires larger healthcare budgets, and insurance premiums are one part of that system.

Healthcare for Older Adults

Japan has a separate healthcare system for people aged 75 and over.

Funding comes from several sources:

• Insurance premiums paid by working generations

• Taxes

• Contributions made by older adults themselves

Before learning this, I had assumed younger workers paid for everything.

In reality, the system is supported by multiple sources of funding, although the growing elderly population places increasing pressure on the overall healthcare budget.

Why Your Deductions Increase After Age 40

Another deduction that surprised me was long-term care insurance.

In Japan, many people begin paying long-term care insurance premiums from the age of 40.

At that stage, a monthly payslip may include:

• Income tax

• Resident tax

• Health insurance

• Pension contributions

• Long-term care insurance

Each deduction has a different purpose, but seeing all of them together can make monthly payroll deductions feel much larger than expected.

Is Japan's Healthcare Really More Expensive?

Looking only at insurance premiums does not tell the whole story.

Japan spends a relatively large share of its economy on healthcare compared with many countries, reflecting its aging population and broad access to medical services.

At the same time, countries such as Germany, Switzerland, and the United States spend even more on healthcare overall.

So while Japan is not a low-cost healthcare country, it is not the highest-spending system either.

The Advantage You Notice When You Need Medical Care

When you're healthy, paying insurance every month can feel frustrating.

I felt the same way when I first started working in Japan.

However, that perspective changes when expensive treatment becomes necessary.

Because health insurance covers much of the cost of eligible medical care, patients often pay far less than the total bill.

Japan also has systems designed to reduce the financial burden of particularly high medical expenses for eligible patients.

Learning about these protections helped me understand why many people value the healthcare system despite the monthly cost.

Comparing Japan and Korea

After comparing both countries, I no longer think one system is simply "better."

Korea is often praised for:

• Fast access to medical care

• Short waiting times

• Advanced medical technology

Japan, on the other hand, places strong emphasis on providing broad access to healthcare while reducing the financial impact of major illnesses through its public insurance system.

As someone who has experienced both countries, I sometimes miss how quickly medical appointments can move in Korea.

At the same time, I appreciate the financial protection available in Japan if a serious illness or hospitalization occurs.

Each system reflects different priorities.

My Biggest Takeaway

When I first saw the deductions on my Japanese payslip, I only noticed how much money was leaving my salary.

Now I pay more attention to what those deductions help support.

Japan's health insurance may feel expensive, especially when combined with resident tax, pension contributions, and long-term care insurance.

But after understanding how the system works, I no longer see those payments in quite the same way.

Rather than comparing only the monthly deductions, it makes more sense to consider the protection the system provides when medical costs become unexpectedly high.

Frequently Asked Questions

Why does Japan's health insurance feel expensive?

Many people notice it because it appears as a separate deduction alongside resident tax, pension contributions, and other payroll deductions.

Is Japan's healthcare system very different from Korea's?

Not completely. Both countries have universal healthcare systems, but Japan's older population creates different financial pressures.

Why do deductions increase after age 40?

Many people begin paying long-term care insurance premiums from age 40, increasing their total payroll deductions.

Does Japan's health insurance cover all medical costs?

No. Patients generally pay part of the cost, while public health insurance covers much of the remaining eligible medical expenses.

Related Reading

Understanding health insurance is only one part of managing your finances in Japan.

If you're also wondering why another deduction suddenly appears on your payslip, you may find this guide helpful:

Is Japan's Resident Tax Really High? Understanding How It Really Works

Note

Health insurance premiums, eligibility, and coverage may change over time. If you have questions about your own situation, check the latest information from your health insurance provider, your local municipality, or Japan's Ministry of Health, Labour and Welfare.