The New Zealand Herald kicked off their five-part series on cancer today. Martin Johnson investigates the controversies in cancer testing and treatment and the moving stories of people diagnosed with cancer.

I've mentioned many times, here in my blog and many times to clients and frankly anyone who will listen, that our public health system, while good in many areas, often falls short in many others.

Managing medical expenses is a large area of risk management. It is also an area where people often don't spend a lot of time. Public health is an area where the government spends the most ($15 billion for 2015), which should be an indicator that you need to consider your options here as well. 

Private health insurance contributed an additional $2 Billion towards New Zealanders' health treatment in the 2015 financial year, and that represents only about 25% of the population that actually do have health insurance.

This leads me to the number of about $6 billion for the shortfall in health spending here in New Zealand. Yes, some of that will be covered under the current public spending, but there are still many more people who aren't seeking treatment or getting treatment when they should that are not accounted for at all.

Articles that are worth a read so you have a better understanding of what you have available to you now to ensure you have options later

• The New Zealand Herald's 5 part series on Cancer, Breast Cancer, Bowel Cancer, Lung Cancer, Melanoma, & Prostate Cancer. 
• This article discusses waiting lists.
• This article discusses the impact of people having less private medical insurance and the pressure it creates on the public system.
• This article discusses insuring your new baby.
• This article discusses the role of Pharmac, how medicines are funded, and what this means for you when they are not funded.

 Medical insurance can be very specific for people. Some policies can be very good, others not so much, depending on what you expect from them and your situation.

Get access quickly

In real terms, medical insurance is about getting access to medical treatment as quickly as possible.

• If you have an accident or a life-threatening situation, calling an ambulance and getting treatment in a public emergency room is the best place for you.
• Private hospitals in New Zealand don't handle emergency medicine.
• Once you are stable and emergency discharges you, this is where the access to medical treatment, if you still need it, becomes a bit daunting and potentially a bit frustrating.

Maintain quality of life

There is a growing feeling that waiting lists do not represent the full picture of need.

• There is a growing body of evidence that a significant number of people needing treatment for non-life-threatening conditions are just not getting treatment. It's become too hard for them.
• They may have started the process with their GP but have just given up waiting to get to the next stage, and their condition is perceived as one that doesn't warrant the hassle.
• Regardless of severity, this affects quality of life.

This is where medical insurance can help, yes it costs money and at the lower end of need and treatment it may well be cheaper to just pay your own way.

• This tends to be true for GP costs and Prescriptions, where we often see people paying more for GP and Prescription coverage than they ever claim.
• Often because they pay for the insurance but don't bother with the claim.
• It would probably be better to spend the money on a good surgical policy and continue paying for GPs as they have been.

Manage expenses

There are a significant number of people on 80% medical plans, these don't feel so bad to start with.

• 80% of GP costs are covered and paying $80 towards a $400 specialist consult isn't too painful.
• At the more extreme end of the scale, for say a heart bypass, it starts to hurt financially.
• This is where a lot of people with an 80% medical plan end up getting treatment in the public system, it's become too costly to go privately.

Having a good 100% coverage plan means you can be assured your treatment costs will be covered. If you can sustain some costs, introducing an excess can help manage premiums and contain these costs.

Cardiac Care

This is one of the significant reasons you have medical coverage.

• With modern medical technology, the treatments for cardiac care have become less invasive, but they haven't necessarily reduced in cost.
• With a heart bypass surgery currently costing between $50-70,000, finding $10,000 to $14,000 on an 80% medical plan to go private becomes financially challenging for a lot of people, and they wait for the public system to get to them.
• Heart Bypass and valve replacement currently costing between $50-70,000, you are having to find $17,000 to $22,000 on an 80% medical plan.
• This is risky at best, life-threatening as a minimum.
• Getting treatment quickly is why you have good cover, you shouldn't have to have a heart attack to get looked at quickly, as often happens.

Cancer Care

The other significant reason you have medical cover.

• If you are looking at cancer treatment, then it gets even more costly.
• Chemotherapy can cost between $6,000 and $500,000 per course, depending on the treatment required and whether it is funded or not.
• Some medical policies don't cover unfunded medications, and our largest medical insurer has only a small contribution to unfunded medications at best.
• All medical insurers have benefits that will pay for unfunded cancer medications; for most of them, you have to request to have them added, as they don't come standard.
  • Many older policies haven't been reviewed by policyholders and have not had this added to their cover.
• You shouldn't have to get a mortgage on the house or fundraise to pay for this.

Pre-Existing conditions

We have an option to cover people's pre-existing medical conditions once they hold cover for 3 years. So there are ways to get you covered.

• However, this is often expensive and limits what you can get covered for.
• Normally, as an existing known risk, insurers will tend to want to avoid covering these, being focused on insuring the unknown.
  • If it's known, then it will be excluded.

Keeping in mind that if it is an existing managed condition, then this possibly isn't what you need to worry about; the two C's above are probably more important to focus on.

• With trauma policies on the market covering up to 60 conditions and paying around 95% of claims for Cancer, Cardiac, Stroke, and Kidney conditions, the focus is more on the severe end.

If you want to have a frank conversation about insuring your medical expenses in the way you want them covered, give us a call.

We'll walk you through the options and discuss the pros and cons in plain English.