Older persons drive health insurance growth

News release
10 August 2007

Older persons drive health insurance growth

A surge in the number of people aged 60 and over with health insurance is behind official figures released today showing continued growth in voluntary health insurance coverage in New Zealand.

In the year ending 30 June 2007, the number of persons aged 60 and over with health insurance jumped by 12,900 (6.2%) according to statistics released by the Health Funds Association of New Zealand (HFANZ). The total number of New Zealanders covered by health insurance increased by 19,300 (1.4%) over the year.

HFANZ Spokesman Roger Styles says the increase is a sign that New Zealanders are realizing that having health insurance is the best guarantee of prompt treatment for a host of elective procedures.

“There is an enormous amount of variation around the country in terms of just how sick people have to be to qualify for treatment in the public system. Many are being referred back to their GP until their condition deteriorates enough.

“The uncertainty is prompting more people to stick with their health insurance as they age, rather than dropping it as premiums rise.

“We are aware that some GPs are advising patients with insurance to hang onto it. Without insurance, the alternative to a lengthy wait on the public hospital waiting lists is to pay the total cost of private surgery. For procedures like coronary bypass grafts, this can cost around $30,000 - $40,000. Total hip or knee replacements can cost $20,000.

While the increase in the number of older persons retaining insurance is positive, the industry is still concerned about the drop-off in coverage as people age. It is exploring options to help people retain their insurance as they age and premiums increase.

“Affordability is a big issue. As claims costs rise for older age groups, premiums rise alongside these. Presently health insurance coverage peaks at around 50% for people aged 55-59, but for the 65-69 age group this falls off to just 33% coverage. By age 70-74 it is only 24% coverage.

“If we can help more people to retain their health insurance as they age, there are benefits for all concerned, including freeing up resources in the public sector and reducing health costs to the Government.” Mr Styles concluded.

ENDS

Health Insurance Statistics June 2007 (PDF)

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