Health Insurance 101 with Andy

Health insurance is often seen as a luxury, and while it’s not a necessity, it’s incredibly handy to have.

The key benefits of health insurance:

  • Health Insurance gives you control over your health and how you’re treated if you become unwell.
  • You can skip public waitlists and have treatment quickly and on your terms.
  • You will be treated in a private hospital by leading specialist consultants.
  • You can get cover for non-PHARMAC drugs.
  • You’ll get more treatment options using the latest in medical technology.
  • You’ll have security knowing that you have cover if anything happens.
  • Follow up treatments, consultations and rehabilitation are also included.

But here’s the thing: not all health insurance is created equal. In fact, it varies significantly between insurers and products, and not even all insurance brokers understand it properly. It’s crucial to work with an insurance expert: someone who knows health insurance like the back of their hand.

So, what does health insurance cover?

Some people assumer that health insurance will cover everything, but it depends on your policy. It may cover:

  • Hospital and surgical costs
  • Specialists and tests
  • Full add ons, including GP visits, optical and dental, physio and chiro.

You may want full cover with all the bells and whistles, or perhaps you’re only interested in something to cover you for major health events. Either way, there is an option available that will suit you. Let your adviser lead the way here.

Image from the AIA website.

Specialists and tests: why it’s a goodie.

Adding on specialists and tests will cover you for specialist appointments, health screening, tests and diagnostic imaging – whether or not you require surgery.

It costs approximately 25% more to have specialists and tests, but it is a valuable cover to have if something does happen. Keep in mind that certain health conditions may not require surgery but may require ongoing consultation and treatment via a specialist.

Q. What’s an excess, and how does it affect my insurance?

An excess is the amount that you contribute to a claim. You get to choose your excess at the time of application, and if you choose a higher excess, you will receive a discount on your premiums.

When we choose your excess, we factor in your:

  • Current health status
  • Age
  • Budget
  • Preference

Having a higher excess will indeed make your premiums cheaper, but it could mean you may not be able to claim for lower-cost procedures and treatment.

For instance, I had a client recently who needed a colposcopy, but they have a $2000 excess, so they will have to pay for the procedure out of pocket or wait to have the treatment publicly. It’s something we keep in mind when we set up your policy. Finding the right balance for you is important: would you prefer to pay a lower premium and contribute more if you need to claim – or pay a higher premium but have a no or low excess to claim?

Graphic from the NIB website.

What about Non-PHARMAC drug cover?

PHARMAC is the New Zealand government agency that decides which medicines are funded in New Zealand. Non-PHARMAC drugs and pharmaceuticals are not covered and can be expensive – sometimes to the tune of hundreds of thousands of dollars per year for a course of treatment.

What you need to know:

  • Not all policies are equal when it comes to non-PHARMAC drugs.
  • Some only provide cover for cancer drugs.
  • Some don’t provide any cover at all.
  • Some policies provide a substantial amount of cover.
  • Some have very low nominal levels of cover.

You only have to look on GoFundMe or read the frequent media articles and appeals to see how many people are looking for funding for non-PHARMAC cancer treatment drugs in New Zealand. It’s incredibly sad to see, and it’s the reason I always speak to my clients about non-PHARMAC cover.

Need to know: NEW cancer only cover

If full health insurance doesn’t feel like the right fit for you (or your budget), you now have the option of cancer only cover, which provides private care for cancer treatment. It covers non-PHARMAC cancer drugs too.

Cancer only cover is around 30% of the cost of full health insurance. It’s an excellent option for older clients where premiums are too expensive and for younger clients who aren’t sure about taking out full health insurance.

Kids Cover

On average, Kids Cover costs about $5 a week, so it’s not a huge investment.

While the public system is pretty good for kids, going private allows you to choose your surgeon, where the procedure is performed, and when you have the treatment. You can skip the waitlist and enjoy the comforts of private care. For instance, if your child needs their tonsils out, you won’t be waiting months and dealing with tonsilitis until you can get in.

Common claims for kids include:

  • Grommets
  • Tonsillectomy (removal of tonsils)
  • Strabismus (correction of eye muscle movement)
  • Tongue and lip tie correction

The fine print – and the extra benefits you need to know about.

Your adviser should know your policy inside and out to help you maximise your benefits if you make a claim.

Some additional benefits include (depending on the policy):

  • Travel costs for you AND a support person for your treatment is over 100km from home, including accommodation, flights or petrol.
  • A public hospital cash grant of up to $300 per day. If you’re in the public system (say for a car accident), after your third night, you’re eligible.
  • If you’ve had treatment in the public system that you could have otherwise had privately, you can get a refund of your years premium.
  • Voluntary treatment overseas or treatment overseas if not available in New Zealand.
  • Treatment overseas where the waiting period in an approved facility is over six months
  • Breast reconstruction post-masectomy.

One of my clients had heart surgery in Wellington at a private hospital, and he and his partner travelled down together the day before. She stayed nearby in a hotel so she could support him through surgery. The policy covered their accommodation and travel costs.

Unless your adviser is on to it, these additional benefits are easily overlooked and missed during the claims process.

What about pre-existing conditions?

A pre-existing condition is a medical illness, injury, or symptom that you already have – or have sought treatment for – before applying for health insurance. The insurer may choose to exclude this condition from your cover.

Most people have at least one. We do our part by reviewing your exclusions with your insurer regularly.

Say you had a sore knee last year that required an x-ray but didn’t need any further treatment; it is likely to be automatically excluded. In two years, if you’ve had no additional problems with the knee, we can review the exclusion and get it removed. If your adviser isn’t reviewing your exclusions regularly, you could be missing out on valuable protection.

There are other options, too. For instance, NIB has a policy that covers most pre-existing conditions after three years.

Health insurance is the most strictly underwritten insurance because of the ease with which you can claim. Remember that exclusions are not necessarily permanent – they can be reviewed, and we are proactive with this process.

In a nutshell:

  • Health insurance is complex, so work with someone knowledgeable.
  • There’s a policy type to suit everyone’s lifestyle and budget, and some cover is always better than nothing.
  • Working with an experienced adviser takes the guesswork out of the whole process and means you’ll have someone in your corner if you need to make a claim.

Got a health insurance question? Let us know!

While we’re home loan and insurance experts, our blog posts are for general information purposes only and are not intended as financial advice. If at any stage you need personalised advice, get in touch on 0800 346 765, or email


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