Foreign residents in Japan face significant changes to healthcare costs as the government implements reforms aimed at controlling the nation's growing medical expenses. Two major policy shifts announced in December 2024 will affect how much patients pay for both routine medications and serious medical conditions. Starting in 2025, the Ministry of Health, Labour and Welfare (MHLW) will require patients to pay additional out-of-pocket fees when doctors prescribe 77 medications that have similar over-the-counter (OTC) equivalents available at pharmacies, according to NHK. This new cost-sharing system targets commonly prescribed drugs that patients could theoretically purchase without a prescription. The list of affected medications includes widely used drugs familiar to many expats. Hirudoid gel, a popular moisturizing treatment often prescribed for dry skin conditions, will require additional patient payment beyond standard co-pays. Loxonin tablets, a common pain reliever and fever reducer equivalent to ibuprofen, also appears on the list. The MHLW's proposal represents a fundamental shift in Japan's prescription drug coverage philosophy, encouraging patients to self-medicate with pharmacy products for minor ailments rather than seeking prescriptions covered by national health insurance. For foreign residents accustomed to Japan's comprehensive health coverage, this change means evaluating whether visiting a doctor for certain conditions remains cost-effective. While prescription medications currently require only a 30% co-payment under national health insurance, the additional fees for OTC-similar drugs could make pharmacy purchases more economical for routine issues like headaches, minor pain, or skin moisturization. Simultaneously, Japan is reforming its high-cost medical care system, which protects patients from catastrophic medical expenses. The government announced it will raise monthly out-of-pocket limits under the High-Cost Medical Care Benefit System starting August 2025, according to NHK. These increases will be income-based, meaning higher earners will face larger maximum monthly payments for expensive treatments. The High-Cost Medical Care Benefit System currently caps how much patients pay per month regardless of total medical costs. Once patients exceed their income-based threshold, the national health insurance covers remaining expenses. This safety net proves crucial for serious illnesses requiring surgery, cancer treatment, or extended hospitalization. The August 2025 reforms will raise these monthly caps according to income levels, increasing costs for middle and high-income foreign residents. Significantly, the government will also introduce annual out-of-pocket maximums for the first time. This new feature provides yearly cost predictability for patients facing chronic conditions requiring ongoing expensive treatment. While monthly limits increase, the annual cap may benefit some patients with persistent medical needs spanning multiple months. These reforms reflect Japan's struggle with rising healthcare costs amid a rapidly aging population. The country's national health insurance system, which covers nearly all residents including foreigners with valid residence status, faces financial pressure as medical expenses climb while the working-age population shrinks. For expats, these changes require adjusting healthcare budgeting and decision-making. Consider building larger emergency medical funds to accommodate higher potential out-of-pocket maximums, especially if you have higher income levels. Families should review their typical prescription medications against the 77-drug list to estimate additional costs. Expats may also want to explore supplemental private health insurance options that could offset increased out-of-pocket expenses, particularly for high-cost medical scenarios. Some employers offer enhanced coverage that may help bridge gaps created by these reforms. The practical impact varies by individual circumstances. Young, healthy expats rarely approaching high-cost thresholds may notice minimal change, while those with chronic conditions or higher incomes will see more significant effects. Understanding these reforms helps foreign residents make informed healthcare decisions and maintain financial preparedness in Japan's evolving medical landscape.