No one likes to think about getting sick or being injured. But have you thought about how well prepared you are to get back on the path to recovery, if you do?
More and more New Zealanders are taking out health insurance – and it’s paying out big sums of money to help out with specialist treatment, operations and ongoing medical care.
Health insurers pick up the bill
Data from the Health Funds Association, which represents most of the health insurers in New Zealand, shows that 1.4 million New Zealanders now have some form of health insurance. Last year, health insurers paid out almost $1.4 billion in claims – almost as much as all other types of personal insurance combined.
There are a range of options available in the market now, depending on whether you’d like to cover day-to-day health care (like GP visits), hospital care (e.g. elective surgery) or both. Some policies also cover treatments that aren’t currently funded by Pharmac.
The biggest benefit of having health insurance is that you’re not reliant on the public health system when you need treatment for a condition that’s considered non-urgent. These can include things like elective surgeries (for example, hip replacements) and earlier cancer diagnosis and treatment. If your health insurance covers the procedure you need, you can contact your insurance provider and make it happen.
Private treatment can be pricey
Sometimes, even simple surgery isn’t something most people can afford to pay for out of their pocket. So without health insurance, you could face a long wait on a public wait list.
Southern Cross, which is New Zealand’s biggest health insurer, said its most common claim is for a knee replacement. In the year to March last year, it paid out $47 million for 1,870 of those operations – or about $25,133 each time. Another $47.3 million was spent on 2,005 hip replacements and $44 million on 20,595 colonoscopies.
Surgery to get rid of worrying skin legions was also a common claim – Southern Cross paid for 30,000 people to have this done, at an average cost of $1,253 each.
The three most expensive operations performed on Southern Cross’s tab in its most recent full year were spinal fusion surgeries. These can cost more than $200,000 each time.
Another health insurance provider, Accuro, paid out more than $22 million in claims last year and nib $73.7 million, which was up 16 per cent on the year before.
You might think some of these conditions only apply to older people, but insurers also report strong demand for things such as tooth extraction, endometriosis treatment and skin treatments for younger patients.
Bigger than you think
Research carried out by Southern Cross in 2016 showed that many of us underestimate how much it would cost us to get treatment through the private system, without having to go on a waiting list for public healthcare. It found that a third of people thought a hip replacement might cost less than $1,000, whereas it can actually cost anything up to about $30,000.
More than 60 per cent of the people surveyed thought they could get a knee replacement for $10,000 or less, but it would usually cost three times that.
Clearly, the backing of a health insurer can really pay off, and more than you expect. The table below gives you some practical examples:
SOUTHERN CROSS TOP FIVE CLAIMS FOR FY2019
|Procedure||Total paid||Number of claims|
|Total Knee Replacement||$47.40m||1,870|
|Total Hip Replacement||$47.30m||2,005|
|Excision Skin Lesion||$37.57m||29,812|
|Cataract extraction and insert||$28.23m||7638|
Get in touch
With the array of product types, policies and providers in the market, it can be tricky to work out what will be the perfect fit for you. Please don’t hesitate to contact us: as your adviser, it’s our job to make sure you have the optimum protection in place.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
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