Is health insurance worth it in New Zealand?

Benefits of having comprehensive health insurance

Private health insurance offers many advantages, providing not only speedy access to necessary medical services in the event of illness or injury but also financial security and peace of mind.

The premiums you pay entitle you to benefits that could otherwise cost hundreds of thousands of dollars each year. Health insurance gives you the assurance that these costs, coupled with long waiting times in the public health system, will not prevent you or your loved ones from receiving life-saving or life-extending treatment.

Here are some key benefits:

Faster access to specialists, diagnostic tests, and treatments

• The public health system in New Zealand often has long wait lists for non-emergency medical care. With private health insurance, you can bypass these delays and receive timely diagnoses and treatments, ensuring that your health does not deteriorate while waiting.
• Health insurance covers specialist consultations, allowing you to see a specialist promptly. This means faster diagnosis and treatment, which can be crucial for your health outcomes.
• Health insurance gives you the option to receive treatment in private hospitals, which are known for their shorter waiting times.

Financial security and peace of mind

• Medical emergencies and sudden illnesses can be financially draining. Health insurance helps cover unexpected healthcare costs, reducing out-of-pocket expenses, and providing a financial cushion.
• Comprehensive health insurance plans cover high-cost medical needs, including diagnostic tests, surgeries, and cancer treatments not funded by Pharmac. This extensive cover ensures you have access to the medical services you need.
• Knowing that you and your loved ones are covered for various health issues, such as cancer, heart disease, and diabetes, gives you peace of mind.

An insight into New Zealand’s public healthcare system

New Zealand's public health system provides a range of essential healthcare services. Here’s what it typically covers:

• Free inpatient and outpatient services, including specialist consultations, diagnostic tests, and surgeries
• Subsidised visits to general practitioners (GPs) and after-hours services
• Free care for expectant mothers from conception to postnatal care
• Subsidised prescription medications
• Free emergency department visits
• Free ACC (Accident Compensation Corporation) for accidents and injuries
• Immunisations, screening programmes, and health education.

However, New Zealand’s public healthcare system is limited in the scope and delivery of its services. Below is a summary depicting public healthcare vs private health insurance:

Who is eligible for public health services?

Eligibility for publicly-funded health services in New Zealand extends to:

• New Zealand citizens and permanent residents: Full access to all public health services
• Long-term work visa holders: Those holding a work visa valid for two years or more, including their dependant children
• Australian and UK citizens: Eligible if they usually reside in their home country and are visiting New Zealand temporarily
• Refugees and asylum seekers: Full access to public health services
• Accident Compensation Corporation (ACC): Covers everyone in New Zealand, including visitors, for treatment of injuries caused by accidents.

What about eligibility for foreign visitors and short-term work visa holders?

Eligibility criteria for foreign visitors and short-term work visa holders are more restrictive:

• Short-term work visa holders: Those with work visas for less than two years generally do not qualify for public health funding but can access urgent and necessary treatment in some cases.
• Foreign visitors: Visitors and tourists must pay for most healthcare services, though some exceptions apply for emergency care and infectious disease control.

Is health insurance really necessary in New Zealand?

Making the decision whether to include health insurance as part of your financial budget can mean asking some eye-opening questions. Consider these:

“Do you have the time to wait for treatments like elective surgery in the public health system?”

Waiting times in the public health system can be significant. According to Health New Zealand Te Whatu Ora, wait times for elective surgery and other treatments can range from several weeks to over six months, depending on the urgency and type of procedure.

In certain situations, delays in diagnosis and treatment can lead to the worsening of your condition. For instance, having to wait for specialist assessments or medical tests can spell the difference between successful early intervention and more complex, costly treatments later on.

“If your condition impacts your capacity to work, can you afford to work part-time or stop working entirely while waiting for your specialist assessment, diagnostic tests, or treatment?”

Health conditions that affect your ability to work can have a serious financial impact. Without timely access to healthcare, you might need to reduce your working hours or stop working altogether.

Health insurance can provide quicker access to necessary treatments, helping you return to work sooner, pay your rent or mortgage, utilities and household expenses, and maintain your financial stability.

“Do you have funds to access treatment or surgery in a private hospital if waiting lists in the public health system are too long?”

Private healthcare (without health insurance) offers shorter waiting times but is very expensive. Here are some examples of the costs associated with private treatments:

^{Source: nib Claim Statistics December 2022 and *August 2023.}

“What if I have cancer?”

For those facing cancer and in need of prompt diagnostic tests, medications, and treatments, here are some potential private healthcare costs:

^{Source: nib Claim Statistics December 2022}

Without health insurance, costs like these quickly add up, making it difficult for many individuals to afford necessary care. Some may need to consider selling assets or re-mortgaging their home to pay for treatments.

Health insurance can cover a significant portion of your medical and day-to-day expenses, providing access to timely and high-quality consultations and treatments, without the financial burden.

Key considerations before getting health insurance in New Zealand

Making the decision to take out health insurance can be daunting unless you have a licenced adviser, such as Policywise, at your side.

Policywise will help you assess your personal health requirements and evaluate your cover options to tailor the best health insurance for your needs. Have a look at this guide:

Assess your personal health needs and risks

• Consider any pre-existing conditions or chronic illnesses that may require regular medical attention.
• Take into account the health history of your immediate family as some conditions may be hereditary.
• Evaluate your lifestyle, including diet, exercise, and habits, such as smoking or drinking, which can impact your health risks.

Evaluate cover options

• Ensure you understand what each plan covers, including surgery, cancer treatment, hospital stays, specialist consultations, and non-Pharmac medicines.
• Be aware of any exclusions or limitations in the policy, such as waiting periods for pre-existing conditions or limits on certain types of treatments.

Compare insurance providers

• Research the reputation and reliability of different insurance providers. Look for customer reviews and ratings to gauge the quality of their service.
• Compare the costs of premiums against the benefits provided. Sometimes a slightly higher premium can offer much better medical and financial protection. Working with a trusted health insurance broker like Policywise can help make these comparisons easier for you.
• Check for any extra benefits offered by providers, such as wellness programmes, discounts on gym memberships, or 24/7 helplines.

Understand the long-term financial impact

• Consider the affordability of the monthly or yearly premiums in your budget.
• Evaluate potential out-of-pocket expenses like co-payments and excess amounts.
• Ensure the policy offers good cover, considering how your health needs may change over time.

How to save on health insurance costs

Health insurance is a valuable investment - but it doesn't have to break the bank. The following advice will assist you in reducing your health insurance costs:

Choose the right level of cover

It's important to determine the level of cover that best suits your needs. If you're young and in good health, choose a plan that offers essential protection without unnecessary add-ons.

Increase your excess

Opting for a higher excess - the amount you pay out of pocket before your insurance cover begins - can substantially lower your monthly premiums. This approach allows you to maintain comprehensive cover while keeping your premium costs more manageable. Talk to a Policywise adviser about this advantage.

Use the policy wisely

Some insurers offer discounts to policyholders who don't claim or have minimal claims over a certain period, rewarding you for maintaining good health.

Additionally, taking advantage of free health checks and wellness programmes provided by some insurers can help you stay healthy and reduce the likelihood of making a claim.

Compare different insurance providers

Utilising free medical insurance comparison services can help you find the best deals and the most affordable options that still meet your needs. Once you have a good policy in place, it's important to review it regularly. This will ensure it continues to serve you well as your life stages and health needs evolve.

Take the next step with Policywise

Policywise is a 100% free service which tells you which health, life, and disability insurance provider best fits your needs. We offer fast, comprehensive, and easy-to-understand comparisons of all leading providers, and a simple summary clearly recommending which insurer is best for your situation. 

Not all insurance policies are the same. Policywise can help you sort out the duds, avoid the lemons, understand the fine print and exclusions, and get the right health insurance for you and your family.

We make the important decision of where to buy your insurance super easy. We’ll answer your questions, provide experienced advice, quotes, and comparisons, and manage all the back and forth throughout the application process. Taking out your cover through us means you'll have our lifetime support and claims advocacy, and we'll help you negotiate a positive outcome at claim time. We can also take care of lodging any claims on your behalf and back you up if the going gets tough.

Check out the reviews on our homepage for how other New Zealanders have found our service, because now is the time to get your health insurance sorted. Give your family or someone you love the most outstanding financial support possible. Book a 5-minute callback with Policywise today; our service is fast and free.

^{Disclaimer: This article is for general information only. Nothing in this blog or on this website is intended as medical, dietary, or financial advice. Although we aim to update our content regularly, you are advised to consult a Policywise adviser, health professional, or an appropriate specialist before acting on any information herein. They can factor in your personal circumstances or preferences and help guide your decision-making process.}