Japan’s health insurance system is considered “universal,” since it covers everyone in the country, but it is hardly “free” in the sense of having the government pay for everything with tax revenue.

Anyone who lives in Japan must pay into the system according to their income level. And when people go to the doctor they pay about 30 percent of the cost of treatment and drugs out of their own pockets. Some people pay less and a few pay nothing.

There are basically three types of national insurance plans. The shakai hoken system is for company employees, who pay into the system along with their employers. Another system is reserved for civil servants, school teachers and other public workers. Everyone else belongs to the kokumin kenkō hoken system, which was originally devised for self-employed people. However, over the last two decades, more and more employers have opted to hire nonregular workers, and a larger portion of the workforce is engaging in part-time labor. Many of these people do not receive benefits as regular full-time employees do and thus have to acquire health insurance on their own through the kokumin system.

According to the Ministry of Health, Labor and Welfare, in 2016 there were 1.2 million fewer people enrolled in the three programs than there were in 2015, due mainly to stagnant population growth. In addition, over the past decade or so the portion of subscribers who were delinquent in their payments has been increasing. Now about 8.55 percent of people who are supposed to pay premiums do not. As a result of these factors, payments into the system decreased by 3.5 percent compared with 2014. This is a serious problem because in 2015 the amount of money spent on health care was ¥41.5 trillion, a substantial increase over 2014’s ¥40.8 trillion. Expenditures for health care in 2005 amounted to ¥33.1 trillion, which means in the last decade costs have risen by about ¥10 trillion, or a ¥1 trillion a year, even as the contributor pool shrinks through attrition.

The aging population is definitely the reason for the greater expenditure, but it also may be one of the reasons for increased payment delinquency. When a person who has been using shakai hoken retires, they switch over to kokumin hoken until they are 75, at which point they join a cheaper insurance plan for the elderly. However, in those intervening years their insurance payments may go up considerably (though out-of-pocket payments go down slightly), because for equivalent wages kokumin hoken is more expensive than shakai hoken, half of which is paid for by employers.

For instance, a friend of ours who lives in Osaka took a job last year with Universal Studios Japan, which, because it has more than 500 employees, is required to enroll her in the shakai hoken plan. Prior to taking the job she was a freelance bus guide, and paid a little more than ¥19,000 a month for kokumin hoken in her last year of self-employment. She now pays a little more than ¥6,000 a month. For families with dependents, the situation is not much different.

A welfare ministry simulation presents a household with a father earning ¥4 million a year, a mother earning ¥1 million as a part-timer and a 12-year-old son. If this family lived in Tokyo (where payments are cheaper than in Osaka due to the larger and younger contributor pool) they would pay as a household about ¥23,000 a month for shakai hoken and about ¥33,500 a month for kokumin hoken.

Even if you have no income in a given year, you are required to pay into kokumin hoken, about ¥50,000 annually if you live in Tokyo. Those who cannot pay must report to their local insurance office — insurance is administered by local governments — and explain why. Though the office may reduce the payment it will not eliminate it. That can only be done if a person applies for and receives government assistance. People on welfare do not have to pay for their insurance.

Of course, the main reason for ballooning medical expenses is the higher cost of new medical technologies and drugs, most of which the government pays for. When the cost of a procedure or a particular medication goes above a certain level, the patient will be reimbursed for a good part of that cost by the government. For instance, the government approved a new drug to treat hepatitis C in 2014, at which point the drug cost ¥80,000 per dosage, which amounted to about ¥6.7 million a year for the people being treated with it. But patients only paid up to ¥20,000 a month for the treatment, with the government absorbing the rest. The hepatitis C drug has since come down in price, but cutting-edge treatments are being approved all the time, and their initial high costs are paid for by the government.

The health ministry is desperately trying to rein in costs, a good portion of which are incurred by hospitalizations. Japan is infamous for its long hospital stays, but the government in recent years has been actively discouraging people from visiting hospitals for routine treatments while also encouraging hospitals to cut the lengths of stays. One way of doing this is to convince people to die at home.

Owing to a medical culture that insists everything must be done to keep a patient alive, regardless of the quality of life that results, about 80 percent of deaths in Japan occur in hospitals. Gastric feeding tubes (irō) are still a common — and expensive — means of extending dying patients’ lives in Japan, though their use has become very rare in other countries. The government cannot afford this, and so it’s promoting at-home care for terminal patients and netakiri rōjin (bedridden elderly people). The problem is that many private hospitals and clinics resist because they rely on such patients to make money.

In 2014, the breakdown of health care expenditures was 48.7 percent from premiums, 38.8 percent from national and local taxes and 12.5 percent out of patients’ pockets. Expenditures will continue to grow, and in 2025 the huge boomer cohort turns 75, after which their contributions to the system go down considerably, even though they will account for the bulk of expenses.

This means either the government will have to chip in more or younger people’s premiums will go up. The only other alternative is that doctors and hospitals become more rational with care — prescribing fewer drugs, cutting back on hospitalization and even seeing fewer patients. Japan has the longest life expectancy in the world, so the government is hoping the people will start acting as healthy as they are.

Yen for Living, a column that covers issues related to making, spending and saving money in Japan, runs on the second Saturday of every month.

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