Sharechat Logo

Insurers welcome govt review of health cover in ageing population

Tuesday 17th July 2018

Text too small?

Insurers are happy to see the role of private health cover in an ageing population included in a wide-ranging government review.

Health Minister David Clark launched a review of the nation's health and disability sector in May to improve its performance, structure and fairness. The draft terms of reference for the review, to be spearheaded by former Prime Minister Helen Clark's chief of staff, Heather Simpson, envisage a final report by January 2020.

Among the points to be considered are the nation's changing demographics, how resources, funding and capital investment are distributed, and what institutional arrangements are needed. The review will heed other inquiries such as a ministerial group's investigation into mental health, but has been told accident compensation, Pharmac, private health insurance and the disability system are largely out of scope. It can look at ACC's relationship with the health sector and private insurers' interaction with demographic healthcare drivers. 

Roger Styles, chief executive of industry group Health Funds New Zealand, says it wouldn't be proper to consider health insurers as part of the review. But he welcomed discussion of insurance in an ageing population as private coverage and services can help reduce pressure on publicly provided healthcare. 

"We think it's a particularly important thing to be in this review and acknowledges the level of private healthcare," Styles said. "We'd expect to have a bit of input in the process where we've done a bit of work." 

A report commissioned by the industry group said private health insurance provided significant benefits to the national economy by providing another avenue for people to access services with lower treatment thresholds. It also helped the government avoid an estimated $400 million of health spending. 

About 28 percent of New Zealand's population has private health insurance with the penetration rate shrinking as a recovery since the 2008 global financial crisis failed to keep pace with an expanding population. Claims on policies have almost doubled to $1.2 billion over the same period. 

Clark said the Ministry of Health considered a proposal in 2012 to provide tax rebates for people with insurance as a way to save money.  

"The Ministry worked with the Inland Revenue Department and the Treasury to analyse the costs and benefits of this proposal," he said in a statement. "They concluded that the savings from such tax rebates were unlikely to outweigh the costs."

The 2012 health report to then-minister Tony Ryall weighed up a tax rebate against spending more on elective surgery and found the fiscal cost of the rebate alone was "sufficiently great to warrant opposing the proposal" and that the disproportionate benefit for people on higher incomes was another reason to reject it. In contrast, the gains from increased spending on elective surgery offered a "clear-cut and unequivocal gain".

Styles said his group is moving away from advocating for rebates in favour of "how we can encourage more employers" to provide health insurance as a benefit to their staff. That probably fits more closely with the government's future of work programme, he said. 

A separate report commissioned by the industry group from KPMG advocated employer-backed private insurance as a means to ease the burden on the public health system as an ageing population living longer makes greater demands on the sector. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares fall to 5-week low as trade tensions spook investors; A2 drops
NZ dollar benefiting from weaker greenback as markets fret about global growth
PM mum on Kiwibuild head Stephen Barclay's status
Mataura Valley begins infant formula trials
CEO pay and non-GAAP reporting are linked, study shows
ACC levy cuts worth $50M a year to business, says Ardern
Unfair business practices on borrowed time
New director of Vital Healthcare’s manager unfazed by fire-at-will clause
QMS pulls out A$35M from NZ unit in MediaWorks merger
Take care to avoid

IRG See IRG research reports