Health insurance plays key role for ageing population

New Zealand’s population is living longer is likely to put significant pressure on the public health system. But the private sector – and health insurers – are standing by to help, a new report says.

The Financial Services Council has issued a new health trends report on accessible and affordable healthcare.

It notes that, in line with the rest of the world, New Zealanders are ageing. The number of New Zealanders aged over 65 is set to double by 2025.

That could come with health problems, it noted. FSC pointed to a report by the McKinsey Health Institute which said that people would on average spend about 50% of their lives in less than good health, and 12% in poor health.

The FSC said it was important to New Zealanders to “age well” and part of that would be access to health prevention services.

“The New Zealand public system does a good job in providing access to treatment for serious illness and emergencies. However, for non-urgent health conditions there are often delays in accessing treatment,” the report said.

“Private health insurance supports the public system and makes an enormous contribution towards the health and wellbeing of New Zealanders, funding around half of all elective surgery. Most health insurers offer a range of plans from minor medical to comprehensive insurance.”

It said the number of New Zealanders with health insurance had increased by 1.2% to 1.45 million last year.

In total, 37% of New Zealanders said they had health insurance, up from 32% in 2022. The main reason for taking cover was for peace of mind, which was cited by 60% of survey respondents.

Mental health was New Zealanders’ biggest health concern, followed by oral health, nutrition, Covid-19 and cancer.

The FSC said premiums would increase as people aged, and could also rise because of medical inflation. Its data showed that claim levels for those with health insurance would peak at about 60 to 64, and women tended to claim earlier than men, on average.

The cost-of-living crisis had been having an impact, the research showed. Of people who no longer had medical or health insurance, not being able to afford it due to the cost of living was the main reason.

“Globally, trends are starting show that there is a health protection gap, with a growth in individual out-of-pocket medical expenses filling the gap of public and private healthcare which puts pressure on individual finances in an already tough economic climate,” the FSC said.

“Health insurance has an important part to play in the health eco-system and highlights the big policy issues including the increasingly aging yet less healthy population, increased costs of treatment and out of pocket expenses and the pressures on the public health system.

“Across government and the healthcare industry in Aotearoa, we need to start acting now to support our aging populations to be healthier, and drive collaboration between public and private systems through sharing knowledge to create a fair and affordable healthcare system fit for all our futures.”