According to statistics from the Health Funds Association of New Zealand (HFANZ), the health insurance industry funded close to a billion dollars in health claims in 2014.

New Zealand’s health and disability system is mainly funded from taxpayer funds. So from a total of $14.655 billion in funding in 2013/2014, the Ministry of Health allocates just over three quarters of this money to District Health Boards (DHBs) who use this money to plan, purchase and provide health services including public hospitals and the majority of public health services within their areas.

With growing families comes growing costs and New Zealanders will need to shoulder more of their own healthcare costs as public finances become increasingly stretched, health insurers say. A billion dollars worth of claims is a significant contribution which health insurance makes to funding healthcare in New Zealand. Every dollar of healthcare funded through insurance is helping free up resources in the public sector.

There is no denying that healthcare costs will rise due to increasing costs of surgery, plus more people living longer and hence needing more health care in later years. Add to this the obesity epidemic, new strains of flu and all the other ailments associated with modern living and it becomes obvious that New Zealand is heading towards a healthcare tipping point. The government cannot keep providing ever increasing sums of money to prop up the health system, people are unlikely to stop getting sick or injured, so inevitably the public will need to increasingly self insure plus buy various forms of medical insurance to meet their healthcare expectations.

What can you do about all this?


If you are already well into retirement then the answer is not much. Your longevity, genetic composition plus your lifestyle up to this point will have a big influence on your remaining health needs. Stay mentally and physically active, don’t make any hasty decisions to cancel your medical insurance without getting good advice, and understand your full entitlement to medical benefits and hospital access. If medical insurance is not an option then be prepared to spend some of your retirement funds paying for any operations required. It is better to spend your money on your health and welfare, than give it to the kids.

If you are still working then your healthcare options are far greater. Consider:

  • Getting and staying fit and eating correctly. This is a key part of self-insurance as it will hopefully reduce your healthcare demand. Money spent on these activities is akin to a form of long term investing – you are investing now to avoid increased expenses in the future.
  • Develop a specific medical fund. This is common overseas where healthcare costs are astronomical. Not only do you set up a retirement fund, but you also concurrently establish a healthcare fund. The idea behind this being that in the event of you requiring surgery and it not being available in a reasonable time via the public system, then you dip into this fund to get the job done.
  • Seek professional advice on the most appropriate form of medical insurance and which provider to purchase it from. This is a key step as you may end up remaining with that insurer for the rest of your insurable life.
  • It’s also possible these days for the children to have their own medical policy. They don’t necessarily need to be attached to their parent’s insurance cover. How many Grandparents out there would happily pay for Medical Insurance on their grandkids? Or for parents out there that see an underlying need to cover the family for Medical Insurance, but can only afford to cover the kids? The Milestone Direct team can guide you through the medical insurance minefield and identify a policy best suited to your situation.

The message is clear. We all need to shoulder the healthcare burden. If you want quality health care at a time of your choosing then you will need to pay for it – either via a lump sum from your savings or via a drip feed payment using medical insurance where the insurer takes on the risk of funding your current and future healthcare needs.

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Vinessa is passionate about assisting clients to achieve their financial goals. This passion, combined with specialist financial qualifications, and years of work and life experience makes her eminently qualified for advising families and individuals on the most appropriate way to protect assets and build wealth. Vinessa is married to Graham and together they have two boys and one daughter, Marc, Liam and Olivia. Disclosure and Disclaimer: A disclosure statement is available on request and free of charge. While every care has been taken to supply accurate information, errors and omissions may occur. Accordingly, Milestone Direct Ltd accepts no responsibility for any loss caused as a result of any person relying on the information supplied

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