10pc more health insurance claims in past year

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Health insurers stomached a 10 percent increase in claims in the year ending June, mostly due to costs relating to elective surgery, figures released today show.

The Health Funds Association (HFANZ) said insurers paid $797 million in claims in the year, up $72 million, and 80 percent of the value related to elective surgery, or non-emergency surgery and associated costs.

"Growth in claims costs has been running at a high level over recent years due to increased demand, expansion of services funded, and medical inflation. Cost-shifting from the public sector has also contributed," HFANZ executive director Roger Styles said.

In the June quarter claims totalled $212m. On average, claims costs had grown by 9 percent per year over the past five years.

Premium income was also increased by 8.5 percent to $918m, compared with an annual increase of 5 percent for the previous June year.

For the June quarter, health insurance earned $236m in premiums, compared to $231m for the March quarter.

"Increases in premium income over recent years have tended to lag behind the underlying growth in claim costs," Mr Styles said.

But the level of health insurance coverage slightly dropped by 0.1 percent, or 800 lives, in the June quarter, and fell 0.4 percent, or 5200 lives over the full June year.

Mr Styles said the fall took numbers back to where they were in June 2008, with 1.38m New Zealanders having health insurances.

"Overall, coverage tends to be holding up pretty well despite the adverse economic conditions over the last couple of years," he said.

- NZPA