Now I may get into trouble here but someone really should say something about the most common employer promoted health insurance scheme in NZ. I won’t mention their name, but I can almost guarantee the following: if you have an employer based health insurance scheme in NZ, there’s a reasonably good chance it’s these guys.
Having health insurance is critical. The public system isn’t bad – it’s great actually! That’s the problem though. We’re just now seeing the tip of a gigantic demographic shift with baby boomers starting to get critically sick. The time is coming when the public health system will have to get severely ‘wound back’. Visualize the oldies queuing out the door of the already over-crowded hospital with their hips, knees, and cardio issues – a flu for an 80 year old may get priority over a 40 year olds broken back. ‘If it won’t kill you son, then get in line’! So yup, the entitled boomer generation strikes again.
There’s a way through the above-paragraph for you and your kids so take heart! You need to be pro-active though and take out medical insurance when you’re young and you ‘don’t need it’. As an advisory business we hold agencies with NZ’s top medical insurance providers and believe you me when I say this: for a similar cost, you can get cover that is significantly better, than NZ’s ‘leading’ health insurer, even if it’s subsidized by your employer. Here’s a couple of facts taken from policy documents of two insurers (one of them could be yours!).
1 – Affiliated provider vs your choice. Affiliated provider means that the insurer has done a deal with the provider to ensure that the cost is limited for that type of procedure. Your choice is as simple as it states – you choose who you want to see. You should also be aware that the insurer imposes a ‘usual and customary charges test’.
2 – Chemotherapy: NZ’s ‘leading’ provider with most plans will have a limitation of $60k pa for chemotherapy and only $10k of this can be used for ‘non-Pharmac’ drugs (drugs approved for use in NZ but non subsidized – ie, you’ll want these drugs!). With another provider however you could get up to $300k specifically for cancer treatment, per annum, including non-Pharmac drugs. That’s enough of a reason right there to think twice about where you’re insurance sits.
The above are just two massive differences between the most common workplace health insurance scheme and another plan that we use for a lot of families. Let’s talk about demographics again though. The longer the insurer has been in business and the higher the average age of the insured, the more likely it will have the largest contingent claims liability from sick old people. Insurance companies faced with this dilemma either dial up the premiums, or dial down your cover – in some cases both. If what you sign up for is constantly changing, not just in cost, but in what you’re covered for, how much security does that insurance offer?
So you’ve changed jobs recently and an employer subsidized scheme is available – what should you do? If you already have a privately arranged plan, see if you can increase the excess on that plan so they can run concurrently. Your work scheme for minor things, and your privately arranged plan for serious issues.
You’re with an employer scheme and you change roles? Make sure you can continue your plan without medical underwriting if you leave your employer. Remember that if you let your plan lapse, you’ll have to reapply and you may be faced with medical exclusions you never had before.
It’s too late bugger me, what do I do I’ve already signed up?! If you’re in good health – change health insurers* immediately. When you’re healthy you have options – remember that once you get a health condition, that’s it! At the very least though get some advice and don’t let others choose the provider you’re with.
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*Getting advice on any of this stuff is absolutely critical as you can see. Please don’t cancel an existing medical policy without going through the documentation on your own and engaging a trusted adviser who can point out the pro’s and con’s of any other policy that could replace it. Even if your policy is the worst on the planet, it’s better than no insurance at all! This article is opinion only and whilst I’ve done my best to use factual information that’s publicly available, policies can change between now and when you read this. Cover, meet my butt!