HFANZ renews call for health insurance tax breaks

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The Government must make policy changes to reverse the slide in the amount of New Zealanders with insurance cover.

Tuesday, February 7th 2012, 11:06AM 3 Comments

by Benn Bathgate

That's the view of the Health Funds Association of New Zealand (HFANZ) - whose members account for around 99% of health insurance policyholders in New Zealand - outlined in a briefing paper for incoming Minister of Health Tony Ryall.

It says there is an imbalance in health funding and the subsequent rising cost of providing pubic healthcare HFANZ chief executive Roger Styles said, "policy consideration must be given to rebalancing the public and private contributions to health spending."

Currently 31% of New Zealanders, or 1.4 million people, have health cover, but worryingly for insurers the report says insurance levels are trending down, "with a forecast drop in coverage in coming years, particularly for older age groups."

To increase the number of people covered there needs to be specific policy measures that encourage people to buy health insurance, Styles says.

At present health coverage in New Zealand peaks at 45% for the 55-59 age group, dropping to 25% by age 70-74.

The report makes two recommendations to boost the take up of health cover, a rebate on premiums for those aged 65 and over, and the removal of fringe benefit tax (FBT) on employer contributions to workplace health plans.

Styles said they were two targeted measures that would boost take-up, but that the Government response to assessing both had been poor.

"Despite a clear direction from the Associate Minister of Health for policy engagement with the industry on this [rebates for over 65s], progress has been very disappointing," said Styles.

"The process has dragged on over a year-and-a-half with no final report on the proposals for the rebate."

On the issue of Government engagement on the FBT, the report was even more critical.

"Progress in term of engagement on the issue of FBT on employer contributions to health insurance group plans appears to have been non-existent."

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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