Health Insurance in New Zealand

New Zealand has a fairly comprehensive public health system. It’s not perfect. There can be long wait times at emergency departments. And we pay an arm and a leg to visit a GP, after waiting a month or more for an appointment. But in general, living in NZ means you can expect that should be fall seriously ill or be injured, you will receive high-quality care and not have to pay a cent for it.

So how do we even have private health insurance in NZ, given everything is available in the public system for free? As I’ve had health insurance as a perk under a couple of employers here, I can give you a couple of reasons.

It makes going to the doctor cheaper. Primary healthcare (i.e. your GP) costs a fair chunk if you’re an adult in NZ and you don’t have a Community Services Card. At least $40, sometimes a lot more. And don’t even get me started on the after-hours clinics! When we had health insurance through Southern Cross, they stumped up 80% of the cost every time, up to a max of $40 per visit.

It also, and here’s the kicker, lets you skip to the head of the queue if you need elective surgery. For a couple of years, Mrs. R2A suffered from a condition called “trigger finger” in both her middle fingers. It wasn’t debilitating as such, but it was annoying and made it difficult for her to grip things comfortably. After trying some basic remedies that didn’t have much of an effect, our GP recommended surgery.

Now, we could have waited for surgery on the public health system and had it for free. That’s part of the beauty of this country, it’s always there as an option! But Mrs. R2A was on maternity leave and the best time to get it done was before she went back to work as the recovery period for the surgery was six weeks. So thanks to our health insurance, we went private. The overall cost of the surgery, hospital and specialists was about $5000. Southern Cross paid – you guessed it – 80%.

Now $1000 is a long, long way from free. Chuck it in some good investments for a couple of decades and you’ll have a nice wee pile of money sitting there. But it’s a lot better than $5000. And Mrs. R2A enjoys the full use of all her fingers now.

Even after that experience though, for health insurance to be worthwhile you really need a heavy subsidy from your employer. The first employer that provided us with health insurance paid for it in full. The second employer that continued the coverage provided a fixed contribution but because we had our whole family on the policy, we exceeded that and a small amount was deducted from my pay each fortnight.

Now that I’ve changed jobs, for the first time we’d have to pay for health insurance in full by ourselves. My current employer has negotiated some kind of bulk discount with Southern Cross that knocks a few bucks off every fortnight, but that would still leave us paying $64 a fortnight out of our own pocket. For that amount we’re better off investing the money and then withdrawing it if we ever need it, knowing that the public system is there if anything really bad happens.

It is a risk as we brought both our kids onto private health insurance from birth, meaning coverage for any pre-existing conditions (none of which have eventuated yet). That level of coverage will be much harder (or more expensive) to get again in the future. But despite that, we just can’t justify forking that much out. $64 a fortnight is nearly $1700 a year. We’re better off with that money in our savings.

Do you/have you had health insurance? Did you have to pay for it? What are your thoughts? Leave a comment to let me know 🙂

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