Foreign residents in Japan should prepare for significant changes to the national healthcare system as Prime Minister Takaichi's administration moves forward with comprehensive insurance coverage reforms and medical cost adjustments. These changes, set to be finalized by year-end, will directly impact how expats access medications and manage healthcare expenses. According to NHK, Prime Minister Takaichi announced at the government's Council on Economic and Fiscal Policy that the administration will design new systems regarding out-of-pocket costs for medications, including so-called "OTC-similar drugs." These are prescription medications that contain similar ingredients and have similar effects to over-the-counter drugs available at pharmacies. The government plans to reach conclusions by the end of December 2025, with implementation expected during the next fiscal year's budget formation and system revisions. This reform targets a long-standing issue in Japan's healthcare system where patients can receive prescription medications through insurance coverage even when similar products are available without prescription at lower costs. For expats accustomed to purchasing common medications over the counter in their home countries, this change may require adjusting expectations about what insurance will cover. Medications for minor ailments like headaches, common colds, or allergies that have OTC equivalents may require higher out-of-pocket payments or full self-payment in the future. Simultaneously, the Ministry of Health, Labour and Welfare is adjusting the High-Cost Medical Expense System, which caps patient medical costs when treatment becomes expensive. According to NHK reporting, the ministry plans to maintain current upper limits for the "multiple occurrence provision" that protects long-term patients requiring continuous treatment. However, authorities are considering changing how these limits are calculated, potentially shifting from the current monthly calculation system to a different timeframe. This adjustment is particularly relevant for foreign residents managing chronic conditions or undergoing extended treatments. The High-Cost Medical Expense System serves as a crucial safety net, preventing medical bankruptcy by capping monthly out-of-pocket expenses based on income levels. While the ministry's decision to preserve upper limits for repeat users offers some reassurance, expats should monitor how calculation method changes might affect their annual healthcare budgets. The reforms come as Japan grapples with rising healthcare costs driven by an aging population and advanced medical technologies. The government must balance maintaining universal healthcare access—a cornerstone of Japanese society—with fiscal sustainability. For expats, Japan's healthcare system has traditionally offered excellent value, with comprehensive coverage and relatively low costs compared to many Western countries. These reforms signal a gradual shift toward greater cost-consciousness and patient responsibility for routine healthcare decisions. Experts suggest these changes reflect a broader trend toward encouraging patients to make more economical healthcare choices. By increasing costs for prescription medications that have cheaper OTC alternatives, the government aims to reduce unnecessary insurance claims while preserving coverage for treatments without alternatives. Prime Minister Takaichi also met with World Bank President Banga to discuss Japan's commitment to Universal Health Coverage globally, emphasizing human resource development in healthcare sectors internationally. This reaffirms Japan's dedication to accessible healthcare principles even while implementing domestic cost controls. Foreign residents should stay informed as details emerge in the coming weeks. Those regularly receiving prescription medications should consult with their doctors about whether OTC alternatives exist and compare costs. Understanding your income bracket's High-Cost Medical Expense limits remains essential for financial planning, especially for families managing chronic conditions. While Japan's healthcare system remains among the world's most accessible and affordable, these reforms represent the most significant structural changes in years. Expats should prepare for a system that increasingly differentiates between essential medical care—which remains well-covered—and routine treatments where patients may bear greater responsibility for cost-conscious decisions.