'Jam jar' account helps cover health expenses

The millions of New Zealanders who do not have health insurance are being targeted with a "jam jar" savings scheme that helps spread ever-increasing costs.

Southern Cross hopes to attract some of the 2.8 million New Zealanders without insurance to its activa health management account, which features an interest-bearing savings scheme run by the ASB Bank.

The company said it was aimed at young people and families with small children.

The account was created by subsidiary Activa Health after Southern Cross research showed that New Zealanders spent about $2 billion a year on health.

Individuals over 30 spent an average of $1500 each year, while families spent about $2200. More than 70 per cent goes on everyday costs like GP or dentist visits, prescriptions and gym memberships.

Southern Cross chief executive Ian McPherson said only one in three New Zealanders had traditional health insurance.

Activa Health's Louise Kerridge said the scheme involved a $100 start-up, with a minimum monthly contribution of $25.

Ms Kerridge said the new account would give people the opportunity to manage their own healthcare scheme.

A card enables money to be accessed for day-to-day health spending, much like an eftpos card, but only at participating outlets.

The scheme has 350 participating businesses, ranging from pharmacies to radiologists, but the firm hopes to widen its network.

Account holders also have an optional health insurance plan, and automatic access to an insurance benefit of a lump sum of up to $3000 for certain serious health conditions.

The Medical Association's GP council chairman, Peter Foley, said it allowed people to start a "health jam jar".

Personal expenditure was set to rise in the future, and the increase would only be covered by insurance or personal savings.

The Dental Association's executive director David Crum said the scheme could prove positive. "It won't suit everybody, but this is going to help people access treatment. Any treatment can require a significant outlay that is unplanned."

However, he expressed reservations that its benefits were restricted to participating practitioners. "Patients should be able to see the dentist of their choice without a third party dictating that relationship."

Health spending

* Individuals spend on average $1500 on health a year.

* Prescriptions, vitamin supplements and other pharmaceutical spending: $528.Health insurance premiums: $418.

* Gym memberships and sporting equipment: $374.

* The study also found families and individuals underestimate their annual healthcare spend by $500.

Source: TNS poll for Activa Health of 400 people aged 30 plus (figures averaged over the group).