Insurers want to encourage more self-provision in healthcare

Monday 21st February 2011 6 Comments

Health insurers want to see a discussion about ways to encourage greater self-provision in health care.

The call comes after a year in which the number of New Zealanders covered by health insurance fell by 10,000 to 1.38 million.

Total claims rose $60 million from 2009 to $825 million in 2010, while premium income rose $87 million to $962 million.

Health Funds Association of New Zealand executive director Roger Styles said public health spending was growing at double the rate of private health insurance spending, which was the opposite direction to other countries in the developed countries' organisation the OECD.

In 2008, the OECD average private contribution to health spending had been 28%, in Australia it had been 32%, and in this country the private contribution to total health spending dipped below 19.6%.

The gap between this country and the rest of the OECD had widened from 4.6% in 2001 to 8.2% by 2008, Styles said in the association's newsletter.

Between 2004 and 2010, the amount spent by the Government on health rose from $7.6 billion to $12.7 billion, an increase of 41% when adjusted for inflation.

In the same period, private health insurance premium income grew from $646 million to $918 million, an inflation adjusted increase of 20%.

"If this imbalance is left to continue, it would see New Zealand moving in the opposite direction to other OECD countries, at precisely the wrong time," Styles said.

"The twin forces of an aging population and global recession mean we have a small window of opportunity to explore policies which help move New Zealand towards a more balanced health system.

"Most OECD countries recognise there are merits in people making provision for their health care and actively encourage health insurance by a range of means, with various degrees of carrot and stick," Styles said.

"New Zealand is alone in not only being devoid of any incentive, but actively penalising those employers who fund a portion of health insurance costs for their employees.

"The time is right to have another look at how we can encourage greater self-provision in health care."

NZPA

Comments from our readers

On 21 February 2011 at 5:02 pm Bernie Fuller said:

I feel a simple answer would be that the premiums paid to private insurers should be tax deductable. Currently premiums increase as a person gets older to a stage that the annual premiums are a prohibitive cost that few can afford.

On 21 February 2011 at 5:44 pm Waltraud Maassen said:

if the Goverment could made up its mind to give a tax break to priv. health insurance, I bet more people would take up a policy. so long as the goverment has nothing to give, everybody will just use the system as it is..

On 21 February 2011 at 8:29 pm wtf said:

It is going to be difficult even with tax deductability to persuade people of the merits of taking out insurance - the policy for my wife and i which has claims limits, doesn't include GP's or prescriptions, costs a tad under $4,000 per year. Over the last 10 years it has saved the Public Health system about 15 times that figure but it is fast approaching the time when we also will have to cancel the policy. Without tax deductability it is no go for the majority of nzer's, with tax deductability it probably still wouldn't be a priority especially when times are tough and a lot of folk think it's ok to go to the outpatients with very elementary health issues.

On 22 February 2011 at 4:36 pm MDD said:

Another scare tactic by health insurance industry to get legislation changed to increase their profits! For 30 years I was a member, then when I needed them they up the costs so high nobody can afford the payments. The Health Industry only want to insure HEALTHY people!!!

On 24 February 2011 at 4:45 pm R Cameron said:

The figures published tell most of the story - $825m claims paid vs $962m of premiums. That's only 86% return to policy holders so most would be better off putting the money under the mattress!

On 3 March 2011 at 9:58 am Brownie said:

We had Health insurance for aprox. 50 years and not one major claim.When we retired and needed it, could not afford the horrendus premiums.My advice is DONT EVER BECOME IVOLVED IT IS A GREAT RIP OFF.Better to open a special account and pay in a small amount every Month.