Consumers flock to cheaper health cover

New Zealanders are switching in their thousands from comprehensive medical insurance to cheaper, more limited cover.

Latest figures from the Health Funds Association show a major reversal in the numbers since 2000.

The association's executive director, Claire Austin, said the trend was driven by the Government's move to make primary care more affordable, while access to elective surgery in public hospitals - such as hip and knee replacements - became "more and more challenging".

Ms Austin was not sure if the cost of comprehensive cover was driving people towards the cheaper option of major medical expense insurance.

"It could be taken either way. In the same period we've also had the introduction of the primary care strategy."

It was logical to assume that consumers considered they were at risk of missing out on elective services.

As at March this year, 550,000 people had comprehensive insurance, down from 800,000 in 2000.

The numbers with major-medical-expense cover have risen from 500,000 to 800,000 over the same period.

Full cover costs about $3000 a year for a couple with two children, and $5000 for elderly couples, though policies can differ. A couple with hospital-only cover might pay about $1200 a year.

The number of New Zealanders covered by health insurance continues to grow, up 1 per cent in the March 2006 quarter to 1.355 million people, about 35 per cent of the population.

The value of claims paid for the year to March rose 10 per cent, increasing $48 million to $551 million.

National health spokesman Tony Ryall said insurance premiums were higher and people had to decide priorities.

"Priority for most families now is to insure for the need of elective surgeries.

"New Zealanders have realised that despite the Government putting $4 billion into the health system, the chances are that when they need elective surgery it won't be there for them. And people in a position to look after themselves are taking that option.

"The sad part is that there will be even fewer New Zealanders who get access to elective surgery if the previous five years are anything to go by."

But another report compiled by the Health Funds Association shows that public hospitals have increased their share of elective surgery.

It compared five common operations funded by both Government and non-government sectors in 2003/04 and 2004/05. The numbers were broadly similar in 03/04, but in 04/05, public hospitals increased their share of procedures performed, mainly in hip and knee replacements.