Do you need health insurance?

The key question is: do you or your family need health insurance?

If you self-insure (put money aside for medical care rather than pay health insurance premiums) you're betting that urgent conditions can be done on the public health service and you can wait or pay from savings for elective surgery or treatments.

Younger people without dependent children are usually seen as self-insurers but even older people do it.

Health insurance ... pros and cons

Pros

• Cover when you need it.
• No waiting lists.
• Choice of specialist.
• Schedule the time and date of the procedure to suit you.

Cons

• Premiums can be very expensive.
• Premiums escalate with age.
• Pre-existing conditions are often not covered.
• Benefits don't always cover the full cost of treatment.

10 need-to-knows

1. Health insurance gets more expensive as you age – and with most policies the terms of cover can change as well. A number of our members cancelled their policies because the premiums cost too much as they got older. The good news is that premiums are based mainly on age bands rather than personal claims history. So you won't be charged an exorbitant premium just because you claim more often than the next person.
    
2. Pre-existing conditions must be disclosed – and are usually excluded from cover, even if you don't know you have them.
    
3. However, if you disclose conditions they may still be covered. In some cases pre-existing conditions may be covered after a "stand-down" period of months or years but this depends on each case and some insurers may charge a “loading fee” for some conditions.
    
4. If you already have health insurance, be careful about changing policies or insurers. Conditions that your current policy covers may not be covered under the new policy.
    
5. Most insurers use Pharmac's schedule to decide what medicines they'll cover. So if your specialist recommends a medicine that's not on the Pharmac schedule you'll have to pay for it yourself.  
    
6. New and experimental procedures are often specifically excluded. This can lead to battles with insurers about how experimental a procedure is. In one case considered by the Insurance & Savings Ombudsman, an insurer declined to pay for the stents used in an angioplasty procedure. The Ombudsman ruled that stents were not untried technology – so the complaint was upheld. 
    
7. Some life insurance policies may contain health-care benefits as part of a wider cover. But check that health cover in a life policy is comprehensive enough. If you want to bundle health and life insurance together, make sure you get a discount for this. And check whether at a later date you'll be able to cancel one cover while keeping the other going. 
    
8. Insurance advisers and brokers receive commissions for selling you health insurance. Ask your broker to name the companies that quoted and also to disclose what they receive for signing you up. Advisers and brokers often get another bite at the commission cherry each time you take out a new policy and so may encourage you to upgrade to a "better" policy. 
    
9. In many cases, premiums can be suspended if you go overseas for an extended period. This means your cover continues when you get back, although some of the policy conditions may have changed in the meantime.
    
10. Group health schemes are almost always cheaper than private schemes thanks to bulk buying and in some cases employer subsidies. In many cases your pre-existing conditions will be covered under a group scheme.