The soaring cost of private health insurance is forcing many retirees to cancel their policies and rely on the public system.

This is the view of a Tauranga advocate for people over 50, backed up by recent figures revealing only a quarter of New Zealanders over 65 have health insurance.

Consumer NZ revealed that since 2008, more New Zealanders cancelled their policies than took out new ones.

The cost of health insurance for the average household increased by nearly 30 per cent between 2010 and 2013, the report said.

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Health Funds Association statistics for the quarter ending March 2015 showed 150,386 New Zealanders aged 65 and over had insurance, only 24.7 per cent of the population the same age, based on the 2013 census.

Tauranga and Western Bay Grey Power president Christina Humphreys told the Bay of Plenty Times people she knew over 65 had already cancelled their health insurance because they could no longer afford it.

"I don't know anyone who does have health insurance anymore," she said.

"Most people, once they turn 65 and rely on the pension, they drop their health insurance because it's just too much."

Mrs Humphreys is 68 and said she was lucky to be able to continue her own, but expected the price would hike once she turned 70.

"It doesn't seem that long ago I used to pay $60 or $70 and now I pay $250 a month.

Health insurance had become a luxury, she said.

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"And it's not just the health insurance. Some are cancelling their house insurance. That's their way to cut costs to survive."

If health insurance was more affordable then more people would have policies and could go through private healthcare, taking pressure off the public health system, especially for elective surgeries, she said.

A Tauranga woman with an ongoing medical condition said she was paying more than $800 per month for health insurance to cover her and her husband.

"Because we claim, we have no reduction on the premium ... It goes up every single year."

The woman, who spoke on condition she was not named, said insurance was a safeguard for any surgeries she may need but the couple were monitoring the expense closely to make sure it was worth it.

"It's a huge decision for retirees to make ... You can give it up and something major happens but then again you could go under a bus tomorrow."

"Most people, once they turn 65 and rely on the pension, they drop their health insurance because it's just too much."

She said their premium increased every year and jumped about $100 this year after she turned 70 and her husband turned 75.

One Omokoroa resident, who also spoke on the condition of anonymity, said he and his wife cancelled their health insurance about three years ago.

"It was just getting too expensive ... When we both hit 75 the cost was just too high."

Before they cancelled their policy, they were paying about $5520 a year - $460 per month.

Moving from the Far North to Tauranga made it easier to not have insurance because of the handy location to a large public hospital, he said.

Health Funds Association acting chief executive Chris Pentecost said affordability was clearly an issue for the elderly.

Mr Pentecost said premiums increased with age to meet the claims payouts of the same age bracket, he said, which put pressure on older people who retire and rely on the pension.

"The problem is that when we age we tend to require more health care."

The association, which represents health insurers within New Zealand, had been campaigning for a tax rebate for people aged 65 and over, Mr Pentecost said.

"We think that's part of the answer," he said.

If passed, a proposed bill from NZ First, the Affordable Healthcare Bill, "will support the sustainability of the public health service by encouraging people to buy and maintain their health insurance".

"Boosting uptake and retention of health insurance alleviates the burden on public health by freeing up resources and reducing waiting lists. Private hospitals already act as a backstop for public hospital overflow."

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