About health insurance Over 1.39 million New Zealanders have health insurance. Why? Because, like any other insurance, it provides peace of mind in times of difficulty. You cannot tell what health problems may affect you in the future. And you cant foresee how they will impact on your family, your lifestyle or your earning ability. Not all treatments or costs are covered by the public health system, and you often have no control over the timing or quality of care you receive. Having health insurance, however, means that you can choose your doctor or specialist, and you can choose when and where you are treated. All with the assurance that you can recover all or most of the costs. In short, health insurance takes away the uncertainty of your future health care. Public health in New Zealand We are fortunate in New Zealand to have a good public health system, but there are limitations as to what it can provide. If you are very ill or require emergency treatment, you should always go to your public hospital, where you will receive immediate attention. But if you dont require immediate treatment, then youll need to go through an assessment process and qualify for elective services in the public system - a process which could take months, even years. And if you dont meet the criteria for publicly funded surgery you will need to consider paying for surgery in a private hospital, which can be costly - unless you have health insurance. The role of health insurance Private health insurers are able to cover the cost of many semi-urgent and non-urgent procedures. The health insurance industry complements the public health system, by bridging the gap between what the public health system can sustain and what we, the public, want for our health. The health insurance industry makes an enormous contribution towards the health and well-being of New Zealanders. In 2009 health insurers spent around $750 million on healthcare, the majority for the 15-64 year age group. The private system carries out half of all elective surgery in New Zealand. The insurance contract When you apply for health insurance, you will be asked to provide information on your health, lifestyle and family history. The information is used to assess the likelihood or risk of you requiring medical care. Insurance policies are contracts of utmost good faith. The insurer relies on the information given by the applicant in assessing the risk, and the applicant is bound by a legal duty to disclose any material facts relevant to the application for insurance. Disclosure of all relevant health information is very important, for example, if youve had signs or symptoms of illness, but have not yet been diagnosed. Failure to disclose may lead to the insurance contract becoming void. Two main types of policy There are two main types of health insurance policies: Comprehensive Care. These cover primary care costs, such as doctors visits, prescription charges, physio costs and other everyday medical bills, as well as surgical and hospital costs - sometimes up to a preset limit. Elective Surgical and Specialist Care. These only cover health problems that require hospitalisation. You pay for your day-to-day medical costs, such as doctors visits and prescription charges. Sometimes additional cover can also be purchased for extras such as dental treatment or diagnostic or screening treatments. Both kinds of policy usually exclude certain conditions or treatments, such as cosmetic surgery or fertility treatments. In addition, many employers offer group schemes where premiums are based either on the individual risk or on the estimated claims costs of the group as a whole. Group schemes may also offer additional benefits. Pre-existing conditions Pre-existing conditions are health problems that exist at the time you apply for insurance. Most insurers treat these in one of three ways: by excluding the condition from your insurance cover, or by charging a higher premium to cover the condition, or by covering your pre-existing condition only after your policy has been running for a set time (usually three years). It is very important to inform your insurer of any existing medical conditions. Failure to do so may lead to a future claim being declined. Some people ask their GP for their medical notes to help answer accurately. Remember also that if you decide to change your health insurance policy, your new policy may not cover you for any health problems you have at the time you transfer. Thats why its important to take out the right health insurance policy early, before you develop a medical condition that may be excluded from your cover. Elective services Elective services are non-emergency treatments (including diagnostic services), where the condition is not life-threatening and does not require immediate surgery. This can mean delays in accessing these services in public hospitals. Because elective surgery can be vital to improving a persons health and quality of life, many opt for private treatment rather than waiting or going without. Insurance means people can access elective services if needed without paying the full treatment cost. Costs of surgery Procedure and Indicative cost (NZ$)* cardiac bypass (heart surgery): $37,000-$45,000 valve replacement (heart surgery): $43,000-$53,000 angiogram (diagnostic test): $3600-$4400 angioplasty with 2 stents (heart surgery): $17,000-$20,000 total hysterectomy (surgery): $10,000-$13,000 laparoscopic excision of endometriosis (surgery): $4900-$6000 prostate removal (cancer surgery): $10,000-$12,000 prostate brachytherapy (cancer surgery): $21,000-$25,000 excision of cancerous skin lesion: $1000-$1500 colonoscopy (diagnostic test): $1500-$1800 radical mastectomy (breast cancer surgery): $8300-$10,000 radiation therapy (one course of treatment): $15,000-$27,000 gastroscopy (diagnostic test): $1100-$1300 laparoscopic cholecystectomy (gall bladder surgery): $6800-$8400 total hip replacement (surgery): $18,000-$22,000 total knee replacement (surgery): $19,000-$23,000 cataract removal (eye surgery): $3500-$4000 thyroidectomy (surgery): $8300-$10,200 endoscopic sinus surgery: $6500-$7900 wisdom teeth removal: $1900-$2400 varicose veins (both legs): $6300-$7800 hernia repair: $5400-$6600 knee arthroscopy: $4000-$5000 biopsy: $1000-$1500 MRI scan: $1000-$1200 CT scan: $600-$800 ultrasound: $150-$200. *As at January 2010 (incl.GST). Procedure costs will vary depending on the location, the medical practitioner/s and any medical complications, and the medical procedure and technology used. Setting your premiums Your health insurance premium can be set using a risk rating system, a community rating system or a combination of both. Risk rating Premiums are based on age (and sometimes other factors such as gender). People of a similar age and risk are often grouped together in age bands (eg, annual or five-yearly bands). People within the same age band pay the same premium. Under this scheme, the premiums more accurately reflect the true health costs of each age band, which means your premiums will increase regularly as you get older. Community rating Premiums are based on the average cost of insuring a broad age group. Everyone within the group pays the same premium. This means that your premiums will not greatly increase as you age within your community group. Premium swings and roundabouts When youre thinking about any kind of insurance cover, it helps to think of all your insurances collectively as a single package. As you get older, youll pay more for some kinds of insurance and less for others. For example, when you are younger, youll probably pay higher premiums for car and household insurance, but lower premiums for life and health insurance. As you get older, the reverse applies, and you may even no longer need certain kinds of insurance, such as life cover. So while it is true that your health insurance premium is likely to increase over time, you should balance this against the savings you may make with your other kinds of insurance. Why do premiums go up? Premiums go up when the cost of paying out insurance claims increases. Factors that contribute to higher claims costs include: restricted access to public health care (more people claim on private insurance) new medical technology (more costly to provide) an ageing population (with higher average claims amounts) rising medical inflation (ie, increasing consultation, treatment and equipment costs). Why are older people charged higher premiums? Insurers can set premiums based on age, as long as they are based on good statistical data or reasonable medical knowledge. Because older people tend to claim more, there is an increased cost to the insurer, and so their premiums are generally higher. Under the Human Rights Act, a health insurer cannot refuse to insure you because of your age or disability, but they can defer for a period, or exclude specific health conditions. However, the good news is that once you have health insurance, your level of cover will generally remain unchanged, even if you develop an illness or serious health problem in later years. Health insurance tips When planning your retirement income, dont forget to allow for the cost of your future health needs. Remember to budget for increasing premiums over time as health costs and claims rise with age. Ask your employer if there is a group health plan available which covers staff and their families. Often these will be subsidised. Remember to provide accurate information when taking out or renewing your health insurance policy. Most health insurers offer a pre-approval service to give peace of mind that a treatment cost will be covered by your policy. Most insurers offer a range of plan options and excesses which may be tailored to your needs. It is a good idea to review these periodically with your insurer to make sure you are on the plan that best suits. For more information, talk to your insurer. If you have any questions about how your premium is set or your risk assessed, contact your health insurer, who will be happy to discuss these issues with you.
Posted on: Mon, 08 Dec 2014 02:53:57 +0000
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