August 12, 2020
Simon O'Neill
All Blogs

Is Health Insurance Right for You?

Public healthcare in New Zealand is excellent, but for many who want more certainty in their health care it’s not enough. Now is a great time to consider whether health insurance is right for you and your whanau. 

In New Zealand, public care is funded through general taxation. That means all Kiwis receive free or subsidised medical care. Nobody can be refused emergency care if they are unable to pay.

Discussions around whether someone should have private health insurance, in my experience, has been a polarising. There are standout benefits such as being bumped up the waiting list and receiving care or procedures faster than those in the public system. You’ll also have access to features like the mental health navigator and Best Doctors, which (among other things) gets you in touch with over 50,000 of the world’s leading medical specialists to review your diagnosis and treatment plan—giving you a valued second opinion.

If things did go belly-up and you needed treatment, chances are that the additional benefits like parent accommodation, hospice stay, overseas treatments and funding for non-Pharmac approved treatments would be most welcomed.

Covid-19, as you well know, has been a global pandemic with far reaching implications. One close to home has been the ripple effect of lockdown closing medical practices or, at the least, prioritise surgery, consultations, and diagnostic testing. Out the other side of this, with things now “back to some form of normality”, there is a back log. A big back log.

Practitioners and surgeons, for the most part, have their own practices. Often their schedules mean that they have one day a week in the public system and the remaining time in private practice. The pre-approval will also confirm that costs such as surgeons, anaesthetists and physiotherapists are going to be covered—not to mention the pre-operative and post-operative diagnostics, consultations and associated tests.

A recent survey had nearly a third of Kiwis think a hip replacement would be $1000 or less ($27,900 including surgeons fees) and 61% think a knee replacement cost $10,000 or less ($20,000 - $29,000).
The likelihood of someone needing elective surgery in their lifetime is high and research suggests that we highly underestimate their costs. So, building in some cover to your budget would be, at the very least, a consideration.

The reality is, if you need a procedure but you don't meet the pain thresholds for the public waiting list, or have insurance, it is something you'll end up paying for yourself.

The cost of health insurance will likely continue to rise, in part due to the advances in procedures like robotic assisted surgeries. Know what you are paying for and what you can claim on.

Understanding what you have and any potential limitations are an important piece of having any cover in place. For example, I had a migrant client who asked if she was in a car accident, which hospital should she tell the ambulance to go to as she has private health care. Things are done differently overseas and it brought to light the absolute need to make clear not only the benefits but also the differences.

Your adviser is a guiding hand for navigating you through pre-approval (which also currently has a hefty back log) and your claims experiences. We act as a conduit between the specialists and your insurance company.

Simon O’Neill is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.

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