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May 04 newsletter

Welcome to the Shape of Money's May 04 newsletter and our diagnosis of Health Insurance.

Health or medical insurance have made the headlines over recent times as costs have increased across the board, led by the substantially raised premiums from New Zealand's biggest health insurer, Southern Cross.

There is no doubt that costs in the medical sector have been rising substantially over the last decade. New technology and drugs don't come cheap. We are living longer, even while problems such as obesity are increasing (couldn't be written without the pun - sorry).

Both sides of the political fence recognise that their chances at the ballot box depend in part on throwing huge sums at the health sector. Projections by the Shape of Money for huge superannuation costs in 20 years time are matched by equally large sums for the health vote. However, there is no doubt that New Zealand is currently blessed with a first class health system. If you need expensive, emergency treatment, you will receive it.

So the question becomes, "if you don't already have health insurance, should you consider obtaining cover?" Everyone's needs are different but it is an insurance option that should probably be considered.

It is expensive to obtain comprehensive health insurance. However, the peace of mind that such cover brings may be worth it to you. But note that there are other options.

While the public health sector can provide cover for the emergency heart attack, it isn't so good at assisting people who are in need of an expensive, but non-life-threatening, operation. This is where hospital health cover only options come into play - cover for that big expense but at a cost that will fit into many household budgets.

First, check to see if your employer offers a company or industry group health insurance scheme. These can be cost-effective options.

When choosing from the various health insurance options, the usual rules and recommendations that apply to other insurance policies also apply here.

  • If you have all your insurances with the same provider, can you get a discount?
  • Can you reduce your premium by accepting a higher excess?
  • Paying the premium on an annual basis is cheaper than paying in more frequent, regular installments.

Some health insurance providers to consider include: