Increasing health insurance premiums to hit hard
Over 65s will be hit the hardest as health insurance premiums look to increase by around 12% with insurers feeling the impact of a reduction in claims paid by ACC .
Wednesday, March 3rd 2010, 4:17PM
Sovereign has had to hike its health insurance premiums by 12% and Southern Cross will also have an average increase of 12% to reflect the increasing cost of claims, rising health care costs and the reduction in claims paid by ACC.
TOWER says its most recent premium increases averaged 10% reflecting higher than historical claims inflation.
TOWER chief executive of Health & Life Steve Boomert says TOWER like most other private health insurers has been impacted by increased ACC decline rates and reduced physiotherapy benefits.
However an ACC spokesman says while the mass of requests has increased relatively nothing has changed.
"The raw number is going up, we're getting 50,000 ACC requests a year whereas 12 months ago that would have been around 40,000, but we're still approving 80%."
He does admit that ACC is putting a lot more scrutiny into claims to stop the massive growth it saw between 2004 and 2009 where there was a 250% increase in the amount paid for surgery.
Boomert says private health insurance plays an important role in our health care system, funding more than 50% of all elective surgery and he would hope that on-going changes don't drive people back into the public system.
"It is pleasing to see the Health Ministry now has a role for Public/Private relationships and hopefully this will lead to more integrated planning and policy design in the future.
"Funding the health care needs of New Zealand's aging population remains one of the most critical economic challenges for this country."
Health Funds Association chief executive Roger Styles says there has been a huge increase in claims costs with a 10% increase in the 12 months to December 2009 and a 14% increase the 12 months before that, all on the back of a static number of lives covered.
He says the amount of people declined by ACC doubled last year and the rising insurance premiums will have a significant impact on over 65's.
"Last year 137,000 people over 65 had health insurance and $220 million of claims were made which makes the cost of each life covered $1600.
"This is covered in premiums with most insurers making a loss for over 65s - so it's a cost issue."
Styles says time will tell whether people will drop health insurance with the premium increase as even in the recession people were hanging on to their policies.
"I'll expect a slight dip this year if those 12% increases are commonplace."
Styles says industry is hoping that the government will look at a health insurance rebate for over 65s for insurance affordability.
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