Health Insurance 101 with Paul

Health insurance 101 with Paul

Health insurance is often seen as a luxury. It isn’t essential, but it is incredibly useful to have. In this guide, Paul explains how health insurance works and what to look for.

The key benefits of health insurance:

• Control over how and when you are treated if you become unwell
• Treatment without waiting on public waitlists
• Treatment in a private hospital with leading specialists
• Cover for non Pharmac drugs, depending on your policy
• More treatment options and access to the latest medical technology
• Follow up treatment, consultations and rehabilitation

What does health insurance cover?

Not all health insurance is created equal, and what you’re covered for will depend on your policy. You may be covered for:

• Hospital and surgical costs
• Specialists and tests
• Add ons such as GP visits, optical and dental, physio and chiropractic

You can opt for full coverage with all the bells and whistles or a simplified option to cover you for major health events. Either way, there is an option available that will suit you.

Why specialists and tests cover is worth having

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 for specialists and tests, but it’s a valuable cover to have if you become unwell. Keep in mind that certain health conditions may not require surgery but may require ongoing consultation and treatment via a specialist.

What is 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 (cost approx. $1,500 to $2,000), but they have a $2,000 excess, so they will have to pay for the procedure out of pocket or wait to have the treatment publicly. We keep this 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 no or low excess to claim?

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 very 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 Non PHARMAC cancer drugs.
• Some don’t provide any Non PHARMAC cover at all.
• Some policies provide a substantial amount of cover.
• Some have very low 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.

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 are hesitant to take 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 tonsillitis until you can get in for surgery.

Common claims for kids include:

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

The extra benefits people miss

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 and accommodation costs for you and a support person when treatment is more than 100km from home
• A public hospital cash grant of up to $300 per day. If you’re in the public system (say for a car accident), you’re eligible after your third night.
• If you’ve had treatment in the public system that you could have otherwise had privately, you can get a refund of your yearly 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 after a mastectomy.

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 and Southern Cross both offer a policy that covers most pre existing conditions after three years.

Health insurance is the most strictly underwritten insurance because it is easy to claim. Remember that exclusions are not always permanent. They can be reviewed, and we are proactive about this process.

How Finsol can help

In summary:

• 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 process and means you’ll have someone to turn to if you need to make a claim.

If you need help navigating the world of life and health insurance, send us a few details here, and we’ll be happy to help.

Read our guide to getting the most out of your health insurance, or talk to us about finding the right cover. Call us on 0800 346 765 or book a free consultation.

Finsol is a financial advisory business founded in Hawke’s Bay in 2010, looking after more than 6,000 clients across New Zealand. This article is general information only and does not take your personal circumstances into account.</emRead our guide to getting the most out of your health insurance, or talk to us about finding the right cover. Call us on 0800 346 765 or book a free consultation.