You may also find you need a horrifically expensive drug not funded by Pharmac that would be covered under some health insurance policies.<\/p>\n
And surgery waiting lists in the public system are long. Waiting many months for, say, a knee or hip replacement is not only a pain in the knee or hip, but can slow down your whole life. You might have to stop working, or go out less, or exercise less. You might turn into the grouch nobody wants to spend time with.<\/p>\n
To me, it makes sense to put health at the top of your spending priority list. As you get older, or develop health problems, you realise that without your health, nothing else is quite as good.<\/p>\n
\u201cFair points,\u201d the questioner might say. \u201cBut my premiums have shot through the roof lately. It\u2019s just too expensive.\u201d<\/p>\n
There are several causes of that. Healthcare costs have risen fast, partly because many wonderful medical innovations are not cheap.<\/p>\n
Also, people are staying alive longer \u2013 often because of those innovations. And older people tend to have more medical issues, and more complex ones. As the years go by, health insurance premiums rise to reflect that.<\/p>\n
Let\u2019s look at a typical monthly charge for a non-smoking adult with a $500 excess (the amount you pay per year before the insurance kicks in). At 35, you\u2019ll pay about $100. At 55 the premium has more than doubled, to about $220, and at 70 it has way more than doubled again, to $550, according to a Consumer NZ survey in early 2025.<\/p>\n
Once you get into your later 70s, it might be $800 a month, and it keeps climbing after that.<\/p>\n
And no, it wouldn\u2019t work for the young to pay more, subsidising the old. Healthy young people would simply not get the insurance.<\/p>\n
Facing soaring premiums, at some stage, most people with health insurance start thinking, \u201cWhat if I drop the cover and instead save that same amount in a health bank account \u2013 which I promise to never raid for anything but health costs?\u201d<\/p>\n
That promise may well be broken if an emergency \u2013 or a huge temptation \u2013 comes along. But we\u2019ll assume that doesn\u2019t happen. Over the years, the account balance will grow, with the help of compounding interest.<\/p>\n
On average, people who do this should come out ahead. After all, the premiums paid to insurance companies have to cover not just claims but also admin costs, and in many cases profits (although companies such as Southern Cross are not-for-profit).<\/p>\n
So if you\u2019re lucky, and have to make no large withdrawals from your health account for years, you probably will, indeed, end up better off.<\/p>\n
But what if, just a few years down the track, you find yourself in desperate need of surgery and facing a long, long waiting list. You may feel forced to \u201cgo private\u201d.<\/p>\n
Many common surgeries can cost $30,000 or more. And there\u2019s also the often high costs of scans and other diagnostic tests, specialist fees and hospital charges.<\/p>\n
You could well clean out your health account and other savings, and find yourself borrowing money.<\/p>\n
There\u2019s a psychological element to this, too. In all types of insurance, while you can get reimbursement of costs, you still have to deal with hassle and often difficult emotional stuff.<\/p>\n
Nobody enjoys a car crash or the aftermath, even if no one is hurt. And if someone steals your precious things, or your house burns down or is lost to a flood or landslide, there will surely be sadness. It helps not to have to face a financial burden too.<\/p>\n
Being diagnosed with a major illness must be one of life\u2019s worst moments. The last thing you need at that time is financial worries.<\/p>\n
How can you keep your health insurance but cut your costs?<\/p>\n
Think about what would happen financially if you die. If relatives \u2013 although hopefully sad \u2013 would have enough money, you don\u2019t need the insurance anymore. And remember: it wasn\u2019t a waste of money. In earlier years, life insurance gave your family peace of mind.<\/p>\n
Some budget health insurance covers only GP visits, prescriptions and other basics. But that\u2019s not what you want the insurance for. Cover the little costs yourself, and insure for the big bad stuff.<\/p>\n
Healthy readers: now is the time to shop around.<\/p>\n
But if you don\u2019t have that option, it\u2019s tempting for a younger person to say, \u201cI hardly ever go to the doc. I don\u2019t need that cover yet\u201d. Don\u2019t. In the long run, it often works out better to start health insurance when you\u2019re young and healthy, and the premiums are low.<\/p>\n
A privilege?<\/p>\n
Only 35% of New Zealand adults have health insurance, according to MoneyHub. And, unsurprisingly, they tend to be people with higher incomes.<\/p>\n
Some say that means it\u2019s a privilege of the wealthy.<\/p>\n
The counter-argument is that if better-off people are paying for their own healthcare costs through insurance premiums, that leaves more government health money for others. And, hopefully, somewhat shorter waiting lists.<\/p>\n
Mary Holm is the author of No 1 bestselling book \u201cRich Enough? A Laid-back Guide for Every Kiwi\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"You may also find you need a horrifically expensive drug not funded by Pharmac that would be covered…\n","protected":false},"author":2,"featured_media":474648,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[95,23607,806,4995,1643,138,802,37119,295,3273,134,7053,17053,185,702,7052,300,111,139,69,6046,24748,1436,801,239240,3271,26213,6290,1347,1297,19985,1959],"class_list":["post-474647","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-and","tag-approach","tag-as","tag-away","tag-bank","tag-business","tag-costs","tag-explains","tag-fund","tag-future","tag-health","tag-holm","tag-insurance","tag-is","tag-it","tag-mary","tag-money","tag-new-zealand","tag-newzealand","tag-nz","tag-potential","tag-premiums","tag-rise","tag-rising","tag-savviest","tag-should","tag-soar","tag-surgery","tag-wallet","tag-wellbeing","tag-worth","tag-your"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/474647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=474647"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/474647\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/474648"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=474647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=474647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=474647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}