More than 400,000 members of Southern Cross, New Zealand's largest health insurer, can expect their premiums to reduce in the coming year, by more than 10 per cent for many.
But premiums for some members of the not-for-profit society will rise because their age-related increases outweigh the benefits of new
discounts.
A society spokeswoman was last night unable to say how many faced increases.
Southern Cross Healthcare group chief executive Ian McPherson could not state the society's average premium, but pointed to a range of typical reductions from low-claims and founding-member discounts.
A 33-year-old man on the top-of-the-range UltraCare plan who joined Southern Cross in 2001 now pays $1352. This will decrease by $120 this year, to $1232, because of a 10 per cent low-claims reward.
A 76-year-old woman on the KiwiCare Budget plan who joined in 1965 now pays $907. This will go down by $277, to $680, because of low claims and having been a member since 1965.
Dr McPherson was also unable to say how much premiums would rise for those facing increases, but it would only be a "modest" amount.
One member, who has an UltraCare policy, said last night he was annoyed to find out that its annual premium will rise by $132, to $1548.
Dr McPherson said Southern Cross' base premiums were not increasing this year, bucking the trend of some other health insurers and the 7 to 8 per cent inflation in healthcare costs.
Southern Cross' discounts gave total annual savings to members of $35 million - $22 million in the low claims rewards and $13 million for founding members rewards.
This was possible because of previous changes to age-related premiums, control of overhead costs, and reserves being in good shape.
Southern Cross Healthcare made a $41 million loss in 2002, but turned this round to a $43 million surplus last year because of rising premium incomes and lower claims.
The insurer believes it has returned to financial sustainability following its 2002 funding crisis. Southern Cross' then chief executive, Roger Bowie, and chairman, Hylton LeGrice, left after a crisis in which thousands of members faced delays in payouts.
The discounts now being offered to founding members range from 5 per cent for those who joined in 1982, to 10 per cent for those who signed up in the mid-1970s and 15 per cent for those who joined earlier, back to its founding in 1961.
Southern Cross holds more than 60 per cent of the health insurance market.
Dr McPherson said it had started notifying members of the premium changes in the past fortnight.
Premium changes
Heath insurance premiums at Southern Cross will:
* Reduce more than 10 per cent for about 160,000 members.
* Reduce 5 to 10 per cent for 190,000.
* Reduce up to 5 per cent for 50,000.
* Stay the same for 100,000.
* For a further 300,000, premiums will increase by an unspecified but "modest" amount, or decrease for those in subsidised employer group schemes.
Health insurer cuts some premiums, but others rise
More than 400,000 members of Southern Cross, New Zealand's largest health insurer, can expect their premiums to reduce in the coming year, by more than 10 per cent for many.
But premiums for some members of the not-for-profit society will rise because their age-related increases outweigh the benefits of new
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