Foreign residents in Japan will see mixed changes to their healthcare costs in 2025, with insurance premiums decreasing for the first time in decades while medical service fees increase significantly. These adjustments, announced by the Japanese government in late December 2024, will affect both out-of-pocket expenses and monthly insurance contributions for expats living and working in Japan. According to NHK, the government decided on December 24, 2024, to implement a 2.22% overall increase in medical service fees (shinryō hōshū) for fiscal year 2025. This revision represents a substantial upward adjustment to the fees that hospitals and clinics can charge for medical services. The increase breaks down into two components: a 3.09% rise in the "main body" portion, which covers personnel costs for healthcare workers including doctors, nurses, and other medical staff, and a 0.87% reduction in drug prices. This marks one of the larger increases in recent years and reflects the government's response to rising labor costs and staffing challenges in Japan's healthcare sector. For foreign residents, this medical fee revision means that the cost of doctor visits, hospital stays, and medical procedures will generally increase starting in April 2025. Under Japan's national health insurance system, patients typically pay 30% of medical costs out-of-pocket, with insurance covering the remaining 70%. The 2.22% increase in base medical fees will translate to slightly higher co-payments when visiting healthcare facilities. However, the actual impact on individual patients will vary depending on the type and frequency of medical services used. Balancing this increase, expats enrolled in the Japan Health Insurance Association (Kyōkai Kenpō) will benefit from reduced monthly insurance premiums. NHK reported on December 23, 2024, that Kyōkai Kenpō, which covers employees of small and medium-sized enterprises, will lower its nationwide average premium rate by 0.1 percentage points to 9.9% in fiscal year 2025. This marks the first premium rate reduction in 34 years, a historic development for the insurance system. Kyōkai Kenpō is one of Japan's largest health insurance programs, covering approximately 40 million people including many foreign workers employed by smaller companies. The premium reduction results from increased insurance revenue driven by wage increases across Japan and improved financial conditions within the insurance system. Premium costs are typically split between employers and employees, so the 0.1% reduction will lower monthly contributions for both parties. For a foreign resident earning the average monthly salary, this premium reduction could result in savings of several hundred yen per month. While the amount may seem modest, it represents welcome relief amid Japan's rising cost of living. The reduction applies automatically to those enrolled in Kyōkai Kenpō, requiring no action from policyholders. Expats should note that these changes affect different insurance systems differently. Those enrolled in other health insurance programs, such as the National Health Insurance (Kokumin Kenkō Hoken) for self-employed individuals or employees of very small businesses, may see different premium adjustments depending on their municipality and individual circumstances. Premium rates for National Health Insurance vary by local government and are calculated based on income, household size, and other factors. The medical fee increase reflects Japan's ongoing efforts to improve compensation for healthcare workers and address chronic staffing shortages in the medical sector. The government has prioritized supporting healthcare infrastructure, particularly following lessons learned during the COVID-19 pandemic about the importance of maintaining adequate medical capacity and fair compensation for healthcare professionals. Foreign residents should budget for slightly higher medical expenses when visiting doctors or hospitals starting in April 2025, while those covered by Kyōkai Kenpō can expect modest relief through reduced monthly premiums. These adjustments underscore the dynamic nature of Japan's healthcare system as it adapts to demographic changes, economic conditions, and workforce challenges.