Choose your health insurer with surgical precision.
Find out what to look for in a health insurance policy and compare premiums for basic health insurance plans.
If you need a new hip or knee, the wait for public treatment can be lengthy. More than 1.4 million Kiwis supplement our health system with private health insurance so they can skip the queue for elective services.
However, it doesn’t come cheap and some insurers charge hundreds more than others to cover the same family.
We collected premiums from six companies for a basic health insurance plan offering at least $300,000 of surgical care. We collected premiums for a:
We also surveyed our members to find out how they rate the service they’re getting from their health insurer.
Health insurance: do you need it or don’t you? It’s a classic $64,000 question. If you need a hip replacement, non-urgent heart surgery, or a hysterectomy you might well wish you had insurance. If you don’t, you’ll be glad you didn’t spend the money.
Premiums also increase as you age and as new more costly treatments come into common use. When you need it most – once you’re retired – health insurance is at its most expensive.
If you get sick or suffer from a chronic condition, the public health system will help you sooner or later. It’s the “later” bit that makes health insurance worthwhile for some people. They want the peace of mind they can get treatment when they need it and not have to wait.
If you’re considering taking out health insurance, you need to ask yourself:
Can you afford to put aside savings earmarked just for medical bills? If the answer is yes, then you’re most likely better off without health insurance, providing you don’t need to pay for major elective medical treatment when you’re younger.
Can you afford to pay for doctors’ visits? Then it’s probably not worth paying higher premiums for comprehensive cover. Likewise, if you can afford the premiums for budget policies that only cover GP visits and other primary healthcare, such as prescriptions, then you can probably afford to pay for doctors’ visits yourself.
If you don’t make it on to a public hospital waiting list, can you afford to pay for surgery? A procedure like a knee replacement can cost $24,000 to $29,700, according to Southern Cross. Can you afford to pay that? If a condition could stop you working, how much income could you lose?
Are you willing to take some of the financial risk? Some companies offer cost-sharing policies that only pay a percentage of the claim. The idea is if you have some skin in the claim you won’t want to be treated unnecessarily or have the cost of treatment balloon out of control. The other way of doing this is by taking out a higher policy excess in exchange for a lower premium.
What are your chances of needing major surgery? Diet and exercise are vital factors in maintaining health and in reducing the risk that you’ll need medical treatment. Making lifestyle changes may do more for your health than health insurance.
If you do want to take out health insurance, make sure you’re comparing apples with apples when looking at policies.
We’ve answered some of these questions in our policy database.
Changing health insurers isn’t as easy as changing car insurance. Every time you apply, you must declare pre-existing health conditions.
If you don’t, even if it’s by mistake, you won’t be covered.
To avoid accidental non-disclosure, talk to your doctor about what conditions you should include in your application.
If you have low-risk medical conditions, your insurer may still provide cover, hike up your premium, or offer a stand-down period.
You might have a tougher time finding cover if you have a high-risk condition.
According to the Insurance and Financial Services Ombudsman (IFSO), insurers are entitled to limit their own risk.
If you’re thinking about switching providers, consider whether the benefits of the plan outweigh any limitations a new insurer will apply. Ask the provider lots of questions about what it will and won’t cover. An accidental exclusion could end up costing you dearly.
If you need urgent medical care for symptoms of Covid-19, you’ll be covered by the public hospital system.
But what if you’ve had Covid, and are thinking of applying for insurance? Does the virus count as a pre-existing condition?
Spokespeople for Accuro and Partners Life said the virus would be listed as a pre-existing condition but wouldn’t affect premium price or cover.
Southern Cross said if an applicant developed a condition as a result of getting Covid-19, it would consider the ailment as part of its normal application process.
Fully recovering from Covid, without complications, shouldn’t affect your AIA cover. Yet, “if a customer continues to experience symptoms, we may defer their application until after they’ve made a recovery”, a spokesperson said.
Unimed have no plan to increase premiums or consider the infection in the application process.
Partners Life said if you had complications from the infection, which meant it was more likely you would claim on your insurance, there may be additional terms around your cover.
Partners Life also noted that some companies overseas have started to include Covid-19 vaccination status in their policy considerations. Especially if applicants have pre-existing conditions that could lead to complications.
“It is therefore likely that in the near future vaccination status for new applicants with pre-existing conditions, could result in different underwriting terms”, the spokesperson said.
This could mean exclusions for some treatments or more expensive premiums.
At this stage, none of the insurers we spoke to plan to include it as a term of insurance.
We’ll keep an eye on it.
If you need advice ask your GP, not Doctor Google. Anyone can advertise themselves as a “specialist” online. Unless they’re a Medical Council-registered doctor, the appointment will be a waste of your time and money.
Some insurers, such as Southern Cross and Nib, have a list of clinics you need to visit if you want full coverage.
There’s nothing worse than a claim that’s unexpectedly refused, so play it safe by using your insurer’s pre-approval process. Keep in mind insurers will only pay “reasonable or customary” costs – ask the insurer if there’s a dollar limit for the type of consultation or procedure you have planned.
It’s a good idea to review the fine print to check what is and isn’t covered (for example, follow-up appointments).
Here’s the most common claims and the procedures resulting in the insurer’s biggest bills each year:
The top five procedures by total cost:
Premium health insurance offers benefits such as extra travel and accommodation expenses or funeral costs. But these expenses aren’t as frequently claimed as surgical procedures, diagnostic tests or consultations – so weigh up if you’re better off squirrelling this extra money away for a rainy day.
Health insurance companies must belong to a financial dispute resolution scheme. All the companies in our survey are members of the Insurance and Financial Services Ombudsman scheme.
If you have a dispute you can’t resolve with your insurer, you can take the case to the ombudsman. However, the complaint must be “deadlocked” with the company before you can file a complaint.
The scheme can look at complaints about:
The ombudsman can’t look at complaints about premiums, excesses, underwriting decisions or claims above $200,000 (or $1500 per week), unless the insurer agrees.