Many cancer patients are facing an extra shock when they discover their health insurance goes nowhere near paying the full cost of private chemotherapy treatment.

About one in three New Zealanders are affected by cancer and doctors say some people with health insurance assume their policy will cover the cost of private chemotherapy, which can range from $5000 to $150,000.

Southern Cross, the country's biggest health insurer, provides $1300 towards chemotherapy treatment a year - and says it does not provide comprehensive cover for chemotherapy as it has traditionally been publicly funded.

Other companies have policies which provide up to $250,000 towards private chemotherapy treatment.

Doctors, the Consumers Institute and the Auckland Cancer Society are warning people to check what their policy offers and to ask questions first.

Dr Vernon Harvey, a medical oncologist who works in both the private and public system, said the cover offered by Southern Cross was "completely pathetic".

While some people only needed one course of treatment, those with recurring cancer might go through half a dozen courses of treatment over two to three years.

Patients with Southern Cross were often distressed to discover their policy did not cover more than $1300 worth of treatment.

"An awful lot of people go terribly pale when they discover what Southern Cross covers them for. At a time when you are more than a little bit devastated because you have discovered you have cancer and you need chemotherapy, that's the last thing you need on top."

Dr Harvey said he raised the issue with Southern Cross and while the policy was not dishonest it "ran very close to the wind".

"Why do they offer $1300 if they know chemotherapy costs $20,000? That's not reasonable. You wouldn't insure your car for $5000 if you knew it was going to cost you $100,000 to replace it, would you?"

Dr Harvey said some of the expensive chemotherapy drugs were available in the public system, but under "very, very defined criteria".

Another medical oncologist, Dr Paul Thompson, who also works in the public and private sector, said although the policy was spelt out in "black and white" many people did not study it closely.

" It's a little bit iniquitous because people don't know about the costs of treatment, although most people would realise $1000 isn't going to go anywhere with any prolonged treatment. Cancer drugs are exceedingly expensive."

Southern Cross Group chief executive Dr Ian McPherson said it did not pretend to provide a comprehensive cancer treatment service as chemotherapy was traditionally provided by the public system and expected by all New Zealanders.

Dr McPherson said the issue was topical and worldwide premiums were increasing because of the cost of chemotherapy. Average premiums could be driven up by as much as $200 a year if Southern Cross were to provide comprehensive funding.

"I would welcome a debate about it. I think it's irresponsible of them [other companies] to pass on to their customers something traditionally funded by the taxpayer."

Dr McPherson said the Government needed to re-issue a clear statement about what treatments were funded publicly to avoid any opportunity for scaremongering.

The Herald highlighted problems with chemotherapy waiting lists at Auckland City Hospital in August 2003 and again last February - some patients were waiting six to 10 weeks for treatment.

A hospital spokeswoman said people were now waiting two weeks from the time they saw a specialist to when they started treatment.

Insurance companies Sovereign and Tower pay for drugs on Pharmac's Schedule (drugs the Government has agreed to buy for public patients) and said the key for private patients was avoiding waiting lists.

Sovereign Insurance corporate affairs manager David Drillien said it would pay a maximum of $250,000 a year per person, but no one claimed that much. Claims for chemotherapy came in daily and a common amount paid out was about $40,000.

Grant Hill, head of health and life products at Tower, said people could claim up to $60,000 a year.

Policy payouts

* Southern Cross provides $1300 a year towards chemotherapy treatment.

* Other companies provide up to $250,000 towards private chemotherapy treatment.