Is Private Health Insurance Worth It in New Zealand?
New Zealand's public health system is there for all of us, especially in an emergency. So why do so many Kiwis pay for private health insurance? The short answer is speed and choice. Here's what private cover adds, and how to decide if it's worth it for you.
What the public system does well
If you're in an accident or have an urgent health problem, the public system will treat you, and ACC helps with many injury-related costs. Acute and emergency care in New Zealand is generally excellent.
Where the gaps can be
For non-urgent (elective) treatment, things can be slower. You may wait to see a specialist, wait again for tests, and then wait for surgery. In some cases, you may not meet the threshold for publicly funded treatment at all. Meanwhile, the condition can affect your work, your sleep and your family life.
Private health insurance helps you skip much of that waiting by paying for treatment in the private system.
What does health insurance usually cover?
It depends on the plan you choose. Common building blocks are:
- Surgical and hospital cover: private surgery and hospital stays, often the core of any plan
- Specialist consultations and diagnostic tests: faster appointments and scans such as MRI and CT
- Cancer care: treatment, including some medicines not funded by Pharmac (depending on the policy)
- Optional extras: GP visits, prescriptions, dental, optical and physio
Tip: The "base" surgical and specialist cover is usually where the real value is. Day-to-day extras like GP visits can be useful, but they often cost close to what you'd claim back.
Ways to keep premiums affordable
- Choose an excess. Agreeing to pay the first part of a claim, for example $500, can reduce your premium noticeably.
- Focus on the big risks. Prioritise surgical and specialist cover over small day-to-day costs.
- Review regularly. Premiums tend to rise with age, so it's worth checking your plan still offers good value.
Pre-existing conditions
Most health insurers won't cover conditions you had before you joined, at least for a period. This is one reason it's often better to take out health insurance while you're young and healthy, and to be careful about switching policies later, as you could lose cover for conditions that developed while you were insured.
So, is it worth it?
Health insurance may be worth considering if:
- You'd struggle to take a long time off work while waiting for treatment
- You want choice over your specialist, hospital and timing
- You'd rather not dip into savings or KiwiSaver for private treatment
- You have a family and want them seen quickly when something comes up
It may be less of a priority if your budget is very tight. In that case, cover that protects your income may matter more. Many people find the best results come from combining health cover with trauma or income protection.
We can compare plans from several health insurers and help you find a level of cover that fits your budget. Advice is free.
Want a second opinion on your cover? Book a free, no-obligation chat with AFA Insurance. We compare policies from a range of New Zealand insurers and explain your options in plain English. Call 021 985 218 or book online.
This article is general information only and is not personalised financial advice. It doesn't take into account your objectives, financial situation or needs. Policy features, definitions and limits vary between insurers and change over time, so always read the policy wording and talk to an adviser before making a decision. Financial advice is provided by AFA Insurance advisers under the licence of Certainty Financial Advisers Network Limited (FSP677951).