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Over-60s retain health cover

It is becoming increasingly common for people aged over 60 to hold on to their health insurance policies, rather than giving them up as premiums rise.

Wednesday, August 8th 2018, 6:00AM

by Susan Edmunds

Statistics show that the number of people with active health insurance policies drops significantly once they reach their 50s and the cost of maintaining the policies increases.

But Health Funds Association data reveals that there has been an uptick in cover for older New Zealanders over the past year, which it says is due to more people seeing the value of the product.

While the number of teenagers, people aged in their early 40s and early 50s with health insurance dropped year-on-year, there was a 7% increase in coverage for people aged 70 to 74 and a 5% increase in lives covered over age 90.

Chief executive Roger Styles said older people saw value in cover.

“There’s a very high claim incidence,” he said. “If people are using it, they see the value particularly if they are getting elective surgery without having to wait. The pressure on the public system is only going to go one way and it doesn’t really matter how much any government throws at it, there’s a lot of unmet need.”

He said, if premiums became too expensive, people sometimes opted for cheaper alternatives rather than dropping it completely, such as elective surgical cover instead of a comprehensive policy.

Another option that was popular was taking a higher excess, he said. People would opt for a $3000 or $4000 excess instead of $500. That reduced their premiums but meant they were still covered if they needed major surgery.

Overall, there were 1.386 million New Zealanders with health insurance this year, up 1.5% on last year.

Around 15,000 of the 20,100 additional lives covered were in the 20-64 age group, with around 11,000 of them aged 25-39.

HFANZ chairman Geoff Annals said that reflected an overall rise in employment and the fact that more employers were offering insurance as an incentive to attract and retain staff.

He said health insurance had funded in the past year a record $1.207 billion in healthcare, up 5.4% on the previous year. This amount has effectively doubled over the past decade.

A significant number of claims were paid to the over-60 age group and for elective surgery – around half a billion dollars in healthcare claims. HFANZ projections are that health insurance will fund more than $2 billion in healthcare costs for the over-60s over the next four years as that demographic grows in numbers at the same time as more people retain their health cover.


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