Japan's healthcare system is under significant financial strain as national university hospitals report mounting deficits and the government prepares the largest increase in medical fees in nearly three decades. These developments signal important changes ahead for all residents, including foreign nationals who rely on Japan's universal healthcare system. According to NHK, the association of national university hospital directors held a press conference on December 19, 2025, warning that their institutions face substantial deficits for the current fiscal year. The hospital directors emphasized that rising prices for medical supplies, equipment, and operational costs have severely impacted their ability to maintain services. They are calling on the government to establish a framework that adjusts medical reimbursement rates in line with inflation, ensuring hospitals can continue providing quality care without accumulating unsustainable debt. National university hospitals play a crucial role in Japan's healthcare infrastructure, serving as major teaching institutions and providing advanced medical care, particularly in regional areas where healthcare options may be limited. Their financial difficulties reflect broader challenges facing the entire healthcare sector, which has been squeezed between rising operational costs and relatively fixed reimbursement rates under Japan's national health insurance system. In response to these pressures, the government is preparing a significant adjustment to the medical fee structure. NHK reports that authorities are in final negotiations to increase the "main body" component of medical reimbursement fees by 3.09 percent. This portion of the fee schedule covers personnel costs for healthcare workers, including doctors, nurses, and other medical staff. If implemented, this would mark the first time since 1996 that this core component has been raised by more than 3 percent, representing the largest increase in approximately 30 years. The medical reimbursement system, known as shinryō hōshū in Japanese, determines how much healthcare providers receive for services covered under Japan's national health insurance. The system is revised every two years, with adjustments made to reflect changing costs, medical advances, and policy priorities. The substantial increase being considered reflects the government's recognition that healthcare providers are struggling under current fee structures. For foreign residents in Japan, these changes have several important implications. First, while the national health insurance system will continue to cover most medical services, patients may see modest increases in their out-of-pocket costs. Under Japan's healthcare system, patients typically pay 30 percent of medical fees, with insurance covering the remaining 70 percent. If medical fees increase by approximately 3 percent, patients could see proportional increases in their copayments, though the actual impact will vary depending on the services received. Second, the financial pressures on hospitals may affect service availability and wait times, particularly at national university hospitals and public medical centers. Expats should be aware that some facilities may face capacity constraints or adjust their services as they work to balance budgets. Third, these developments underscore the importance of maintaining valid health insurance coverage. Japan requires all residents, including foreigners, to enroll in either the National Health Insurance (Kokumin Kenkō Hoken) or Employees' Health Insurance (Shakai Hoken) systems. With healthcare costs rising, having proper insurance coverage becomes even more critical to avoid bearing the full cost of medical treatment. The government's decision to implement the largest fee increase in three decades demonstrates its commitment to supporting healthcare providers and ensuring the system's sustainability. However, it also reflects the challenging economic environment facing Japan's medical sector as it balances quality care with financial viability in an aging society with rising costs.