What is Health Insurance and why do we need it?

The New Zealand public health system and ACC does a good job in providing access to treatment for serious illness and emergencies. However, many health issues Kiwis face are either not accidental or are for non-urgent health conditions like hip replacements or cardiac procedures and there are often delays in accessing the treatment and it can cost thousands.

Going without treatment for these conditions can have a huge impact on a person’s quality of life.

That is why we have private health insurance, also known as "medical insurance". It removes the worry around unexpected medical bills and is a way to avoid public waiting lists.

It allows you to access the best medical care when, and where you need it.

With Health Insurance, you can have choices around:

• who you elect is insured in your family
• the types of treatment covered
• the level of cover to apply to those treatments
• the location where your treatment is provided
• the contribution you might be willing to make towards the treatment cost (called ‘the excess’).

So, do you need health insurance or don’t you? That’s the million dollar question.

There are two key reasons:

1. Increasing Demand and Pressure on The Public Health System

Whilst New Zealand has one of the best public healthcare systems in the world and New Zealanders enjoy comprehensive medical treatments irrespective of their income level, savings or age, the system is under continuous pressure to cope with increasing demand.

Demand for medical treatment will continue to rise faster than the country’s ability to fund it through taxes. To manage this cost, public health systems use a points system to manage access to treatment and you need to have enough “points” to be eligible for treatment.

Our population is growing, ageing, diversifying and life expectancy is increasing faster than health expectancy (the time spent in good health), so more people are spending longer in poor health.

Plus, not all treatments or costs are covered by the public health system, and you often have no control over the timing of the care you need. So, it is common for people to endure a long and uncomfortable wait until a condition worsens enough for them to be treated in the public health system.

This means you will either pay for your own non-urgent healthcare costs or wait longer for treatment in the public health system.

2. Future Planning

You don’t know what health problems may affect you in the future and you cannot foresee how they will impact on your family, your lifestyle or your earning ability.

That is why health insurance offers people the peace of mind that treatment can be obtained in a timely manner and that all or most of their future treatment costs will be covered.

So having health insurance means that you have access to treatment without facing a lengthy wait. You also have the assurance that you can recover all or most of the costs.

The article is taken from our Health Insurance Guide which aims to make health insurance easier to understand and therefore making it easier to make the right decisions when it comes to protecting what's important. If you want to download the full guide, please click here.