Waiting list warning as health insurance wanes
A sharp drop in the number of people taking out health insurance has prompted warnings public hospital waiting lists will spiral as baby boomers hit retirement age.
The drop-off in private health insurance comes as premiums rise, despite aggressive campaigning from New Zealand health insurance market newcomers NIB and a push to keep older people on health insurance.
Roger Styles, chief executive of the Health Funds Association, which represents insurers, said the number of people with health insurance sat just under 30 per cent of the population or 1.3 million - a decline of about 13,000 since 2012 and the lowest number in at least the past decade.
This compares with about 55 per cent of the population in Australia, where insurance is compulsory for high-income earners, but only about 11 per cent in the UK, which operates a free national health system.
The number of people waiting for surgery sat at about 33,000 in June last year, a similar number to 2009. It has spiked as high as 38,000 in 2011.
Styles said health insurance numbers generally followed economic cycles but an ageing population was also having a marked effect - fewer people over 65 have health insurance and that was increasingly the case because of high premiums past retirement age.
Statistics New Zealand data shows health insurance premiums have increased by 8.2 per cent in the past year alone - much higher than the rate of inflation at 1.5 per cent.
Health insurance premiums had essentially doubled in the past decade, Styles said. This was because claims payouts had also effectively doubled. In the three months to September 2013, health insurers paid out $256 million in claims - the highest ever.
Styles said higher claims and therefore higher premiums had come about for a number of reasons including the fact more people were making claims, particularly those in older age groups.
"The claim incidence rates have increased as access to public elective surgery tightened post 2000."
According to online health insurance comparer, LifeDirect, a 60-year-old non-smoking man with basic health insurance cover could expect to pay $140 to $190 a month. A woman in the same situation could expect to pay between $140 and $170.
A 70-year-old non-smoking man could expect to pay between $240 and $284 a month for basic hospital cover. A woman of the same age could expect to pay between $220 and $306. None of these options would cover GP, dental or optometrist visits.
Grey Power president Roy Reid said paying for health insurance became a problem for retirees if they were relying on superannuation and did not have large savings.
Reid said there had been discussions with health insurers to try to get them to lower premiums without much success. One suggestion was a fixed standard fee for someone joining a health insurance company for life.
He said waiting lists concerned older people.
"We know that the amount of elective surgery is increasing but so is the number of older people. We are living longer so the number of older people is increasing rapidly. There will be a need for bigger increases in elective surgery in the next few years."
Styles said other countries were also seeing a drop in the number of people with private health insurance.
Over the past five years the number of people with private health insurance dropped by about 10 per cent.
"What is becoming clear is that the squeeze on public finances in most countries, together with rising health costs for an ageing population, is starting to see a greater emphasis on private funding of healthcare worldwide."
Styles said the decrease in the number of people with health insurance in this country was "not going to help the waiting lists" and a recent survey by the association found half of respondents believed public hospital waiting lists would get longer in the future.
"In the long run it is not going to keep up with demand," Styles said.
"Over the next decade or two what the government can do with the resources available will be increasingly limited."
Styles said NIB, an established Australian company, were being "reasonably bullish" in seeking to attract new customers and the company had signalled it expected the New Zealand market to pick up.
Toni Ashton, a professor of health economics at the University of Auckland, said the main impact of fewer people choosing to take out health insurance was in the reduction of choice.
Ashton said there was a limited supply of doctors and nurses who worked in both the public and private sector so higher payments attracted health professionals out of the public system.
"Doctors also have some incentive to keep public waiting lists high to fill their private lists."
Research also showed that regions with more privately funded services had less publicly funded services.
"So the main impact of less insurance is probably in the reduction of people's choices of surgeon and of time and place of operation."
- Sunday Star Times
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