How to pick health insurance

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Consumers have a number of different options when it comes to purchasing health insurance, and as with any such purchase it is worthwhile shopping around, taking into consideration a variety of factors before committing to a provider and plan.

Many of these factors will, of course, relate to individual circumstances, and consumers should be conscious of purchasing the plan that is best tailored to meet their needs both in the short and the long term.

As revealed by Health Funds Association of New Zealand (HFANZ) statistics released earlier this year, health insurance is an option that is being taken up by many New Zealanders.

The HFANZ statistics show that last year the number of New Zealanders getting health insurance rose nearly 20,000 year-on-year, with the total number of New Zealanders with private health insurance cover standing at 1.36 million as of December 31.

For consumers thinking of purchasing health insurance, or for consumers considering changing their plan or provider, the following is a guide as to some of the things to look for.

Public healthcare a starting point?

As a starting point, before looking at the offers of various health insurance providers, consumers may find it worthwhile to consider what sort of value health insurance will provide in the context of the public healthcare available.

The Medical Council of New Zealand explains that both public and private healthcare in New Zealand “offer high standards of care”.

“In the public system, essential healthcare services are provided free for all New Zealanders and people in New Zealand on a work permit valid for two years or longer,” the council states of the public healthcare system.

Certainly, for those eligible for public healthcare, the services that it provides should be kept in mind when weighing up the various pros and cons of public healthcare and health insurance.

“Private healthcare in New Zealand includes specialist services, primary care and private hospitals which provide non-urgent and elective treatments that complement the public health service’s focus on urgent and essential treatments,” the council states of the private system.

“There are also many private accident, emergency and medical clinics that operate in the private sector, often providing services outside the usual hours of doctors and clinics in the public system.”

It may well be that, for some consumers, health insurance delivers value in providing for non-urgent care, while for others public healthcare will provide the services they require, and as an initial consideration, consumers should keep this in mind in deciding whether to purchase insurance.

A guide to NZ health insurers

cost and coverage of health insuranceCost and coverage

Consumers deciding whether to purchase health insurance should consider their budget in the context of the cost and coverage provided, and should keep in mind both the short-term and ongoing costs of coverage before selecting a provider.

For the budget-conscious, the balance between cost and coverage should be an important consideration, while it should also be noted that this balance will change over time – for instance, the requirements of a 25 year-old will naturally vary significantly from those in the 60-plus age bracket.

It may be that cheaper policies provide a level of coverage more suitable for younger customers, while more expensive policies, with greater coverage, may be more suitable for customers in older age brackets.

It should also be noted that simply because a policy is cheaper it does not automatically mean that it will deliver greater value – policies should be compared on a like-for-like basis, measured on what they do and don’t include.

What about excess?

One potential way of lowering premiums is by agreeing to pay an excess, a fixed monetary amount that will need to be paid on a claim made, which providers may offer as an option in conjunction with selected policies.

Consumers should keep excess options in mind when assessing the various policies on offer from different providers, as they have the potential to significantly reduce premiums. The other side to this, of course, is that in the event of making a claim, consumers will be liable for a greater upfront cost.

Excess may suit consumers looking for coverage for comparatively more expensive claims, and who are prepared to pay the majority of the cost for less expensive claims. Again, this is a consideration that will come down to individual circumstances.

Excess options may vary from a lot to a little, depending on the provider and policy, having a proportionate impact on the premiums customers pay.

Making the most of incentives or bonuses

Health insurance providers may offer various incentives and bonuses for customers, including financial incentives for customers who lead healthy lifestyles, subject to certain requirements.

Southern Cross Health Society, for instance, offers a “healthy lifestyle reward”, which it describes as “a premium discount for new members who meet certain healthy lifestyle criteria”, with the discount applying for up to two years, after which its low claims reward may apply.

Sovereign’s Healthy By Sovereign, meanwhile, provides for members to earn a range of rewards for looking after their health.

Consumers should also consider whether low-claim bonuses are offered, while providers may also offer other discounts, such as discounts for customers paying by direct debit.

Plan management

It is also worthwhile considering what sort of plan management services are being offered by providers. Such services can help customers keep their plan up to date, providing various online account management and monitoring services, from updating personal details, to managing payments, to making and tracking a claim’s progress.

When it comes to making a claim or applying for prior approval (confirming that a healthcare service is covered), consumers should also be aware of the processes and the different methods of doing so provided by providers, be it by phone, online or post.

Research, compare and shop around

It goes without saying that, as with any purchase, when it comes to choosing a health insurance provider and plan consumers should shop around and do their research, comparing the offerings of different providers.

Consumers should also consider whether they wish to sign up for a family policy, and it is also worthwhile considering workplace health insurance that may be on offer from employers.

Attention should be paid to the various conditions of specific policies, and consumers with pre-existing conditions should determine what exactly they are covered for.

Consumers can access a variety of information from respective health insurance providers’ websites, with many providers also providing the option to obtain a quote and sign up to a plan online, while for consumers seeking further information it is worthwhile contacting the provider directly.

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