Research shows insurers reluctant to cover mental illness

The Health Funds Association says insurers respond to consumer demand.
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The Health Funds Association says insurers respond to consumer demand.

New Zealand health insurance policies offer little cover for mental illness, researchers have found.

Gabrielle Jenkin and Samantha Ernst, of Otago University, looked at 36 policies from five insurers in New Zealand.

They found 55 per cent provided some cover for psychiatric consultations, 11 per cent for clinical psychologist consultations and 36 per cent for psychiatric consultations.

Many of the policies only provided enough cover for a couple of hours with a clinical psychologist or psychiatrist and most had levels of cover for hospital stays that seemed inadequate.

Naomi Ballantyne says mental health can be difficult to cover because there isn't always a curative treatment available.
LAWRENCE SMITH/STUFF

Naomi Ballantyne says mental health can be difficult to cover because there isn't always a curative treatment available.

"We recognise that insurance underwriting is complex and that companies are balancing risk of claims against income. However, it is notable that the available cover is negligible compared to that available for many other common health problems," the researchers wrote.

READ MORE: Record $1.14 billion paid in health insurance claims

Southern Cross Health Society head of product and marketing Chris Watney said, to maintain the affordability of health insurance and ensure it was accessible to as many people as possible, the company did not cover acute conditions or chronic conditions and disabilities likely to be present for six months or more.

"Our cover recognises that lots of Kiwis face mental health issues at some time in their lives and includes benefits for psychiatric hospitalisation and ancillary charges, psychiatrist consultations and psychologist consultations," he said.

"Research we've undertaken acknowledges mental wellbeing as a top priority and we are looking at ways to best serve our membership by providing access to appropriate preventative and proactive measures while maintaining the affordability of our health insurance."

Graeme Edwards, of AIA, said his company was focused on "major medical" cover, while mental health would usually come under doctor and specialist cover.

"However it's an interesting discussion and perhaps there is a market gap that needs addressing as mental health issues are now more widely recognised."

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Naomi Ballantyne, of Partners Life, took a similar approach.  She said a lot of mental health treatments were provided free by the public health system. But in many cases, the treatment would not have a curative effect in the same way the treatment of other conditions might.

It was not like a cancer that was diagnosed and then given a course of treatment.

"What happens with mental health is that they manage you, they don't try to cure you.  If you promote insurance helping to pay for that there's a whole bunch of problems and issues around that... you don't want insurance to encourage a treatment provider dependency."

She said if insurers were to add cover for chronic conditions, premiums would have to increase.

Roger Styles, chief executive of the Health Funds Association of New Zealand, said he was surprised that the coverage was as high as it was. Consumer demand would have prompted insurers to add it, he said. 

"You wouldn't have seen this a decade ago. You see things added when people have trouble accessing them in the public system. A couple of decades ago it was elective surgery. In the last few years it has been cancer and non-pharmac drugs and mental health."

He said consumers could choose the type of policy that best suited their circumstances. "Not every plan will cover everything. It would be prohibitively expensive to do that."

 - Stuff

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