Call to back health insurance bill

New Zealand’s Health Funds Association (HFANZ) is urging Parliament to support a member’s bill that proposes a 25% health insurance rebate for retirees and other measures to incentivise coverage.

Friday, August 14th 2015, 6:00AM

The Affordable Healthcare Bill, sponsored by NZ First MP Barbara Stewart, was drawn from the ballot yesterday.

It proposes a 25% health insurance rebate for people aged over 65, and the removal of fringe benefit tax from health insurance to incentivise employers to include it in salary packages. It also requires parent category migrants to have health insurance on arrival and to maintain it in New Zealand for 10 years.

HFANZ acting chief executive Chris Pentecost said the bill would encourage people to contribute to their elective healthcare costs in a way that was consistent with supporting the public health system in the face of increasing costs, overstretched resources and an ageing population.

“The initiatives in this bill are hugely important. They have the potential to save hundreds of millions of dollars in public sector health costs over the next decade and increase workplace productivity. Any measures which help more people access or maintain health insurance are very welcome,” he said.

The bill states that if more people aged 65 and over maintained their health insurance, they could have shorter waiting times. It proposes a 25% rebate on premiums, up to a maximum of $500 a year, to be paid by the Ministry of Social Development direct to SuperGold cardholders.

For those of working age, the bill encourages more employer-funded health insurance by scrapping FBT on workplace health plans. This aligns FBT treatment of health insurance with insurance under the ACC scheme.

Pentecost encouraged all MPs to support the bill. He said retaining health insurance into old age would ease the pressure on public hospital resources and help address the growth of public sector spending for elective procedures.

NZIER found earlier this year that increasing the number of workers covered by health insurance by 20% could save around $60-$110 million in lost output.

It said an estimated 42,300 New Zealanders were prevented from participating in the workforce due to ill health in 2010, a loss of 88 million hours of labour force productivity amounting to $1.754 billion, or around 1.2%of GDP.

Pentecost said estimates suggested any fiscal costs of the member’s bill would be offset by savings in the public health sector over the medium term.

Tags: health insurance HFANZ

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