Should you have health insurance cover?

Simply, if you can afford it yes.  However, New Zealand does have an excellent Health system - but there are many many things that 'fall through the gaps' that are likely to be covered by a good quality health insurance policy.

There is a big difference in the quality of health insurance policies - at Moneyworks we recommend that you have a health insurance policy that will pay for non-Pharmac listed drugs.  We have an extended-family member who had various cancers, and was in a fortunate position that she could fund the nearly $90,000 per annum for non Pharmac drugs to make her last 6 months of life more bearable.  However, most people can't do that.

We have recently seen appeals for Pharmac to fund two drugs that are used in the Australian and UK health system for breast cancer patients, but in New Zealand cost tens of thousands of dollars if your health insurance policy does not cover non Pharmac drugs (and many policies don't provide this benefit).

However, because New Zealand does have a good health system we can survive without having any health insurance cover in place. We find that a number of our clients who have had health insurance cover for many years make the decision to self-fund health costs when they retire - and particularly when they reach their 70's - and prices go up in leaps and bounds.

So, if you are going to have health insurance cover, what are the things that you look at with your policy?  Few of Moneyworks clients benefit from having the old fashioned insurance cover that reimburse you for doctors costs, prescriptions and small day to day costs.  Generally this ends up being a swapping of dollars exercise. You pay your extra premium for the cover and the insurer reimburses you up to 80% of your actual costs.

The more valuable health insurance cover is the cover that pays for the big costs - hospitalisation, surgery, MRI's, CT scans - other treatments.  You will generally get treated eventually - but it could be a really long wait period, with health insurance you an usually get private attention quickly, which for many people reduces the uncertainty of whether there is anything wrong with them and if there is something wrong, means that it can be dealt with quicker than going through the public system.

We recommend that people look at Major Medical and Surgical cover, with Specialists and Tests cover if that fits within your budget.  You can change the cost to you of the cover by adding or increasing the excess.  The higher the excess on the policy (the amount that you will pay when you claim) the lower your annual premium will be.  And, as mentioned above there is a big difference in the quality of cover available.

At Moneyworks we subscribe to the Quotemonster independent research service, which analyses all the policy wordings and compares and rates the quality of the cover.  We find this invaluable.  In particular we are looking for 'guaranteed policy wordings' and 'Non Pharmac Drugs' as benefits for our clients.

Diana Clement recently spoke to Russell Hutchinson from Quotemonster about health insurance - you can see their discussion here in this article. Saving money on health insurance.

If you would like more information on the options for health insurance cover for yourself, contact your adviser, or if you don't currently work with Moneyworks, email us on contact@moneyworks.co.nz.




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