Unless you’re a statistical anomaly chances are you’ll need serious medical attention at some point in the future. If you’re in any doubt as to the likelihood of that then rock up to any hospital in a major town or city near you — the place is not exactly empty.

What’s even more interesting is that most of those people have had to wait to get in there. Sometimes the wait is a matter of weeks, in other cases it’s a matter of months to years! They have to wait because the public purse isn’t a bottomless pit of money (although the way some MP’s have been spending you’d be forgiven for thinking otherwise). This means funding is rationed which in turn means the most urgent get treated first and those of us with stubbed toes and paper cuts come last. That being the case, getting medical insurance is a pretty smart move as it means you don’t have to wait for treatment.

The flipside of ‘on demand’ medical care is that it costs. How much you ask? Well, outside of your age and whether you’re a smoker or not it largely depends on whether you go for a ‘comprehensive’ plan or ‘hospital only’ plan:

  • A comprehensive plan generally covers you for hospital admissions (whether surgical or not), specialist consultations, diagnostic tests plus there are options to include rebates on GP visits, dentist and optical.
  • Hospital only plans cover you for hospital admissions (whether surgical or not), specialist consultations and diagnostic tests.
    This might sound counterintuitive, but if you want to waste money on medical insurance get a comprehensive plan.


Comprehensive health insurance plans are usually priced about $500 more per annum than a hospital only plan which makes sense because you’ve got cover for the extras. But unless you’re visiting the doctor more than 8 times a year (at $50 a visit, plus a prescription maybe) why are you paying a premium only to claim it back? You may as well pay the doctor directly. The same thinking applies for dental and optical. The most you can claim for this sort of stuff is not even $1000 a year (more like half that) so unless you claim the full amount each year thats money down the dunny.

Perhaps the only time you should take a comprehensive plan is if someone else is paying for it (ie your employer!). No doubt the boss wants to save a dollar too so maybe you could point this out to them and score some brownie points?

What else should you look out for?

In addition to that, most plans (whether comprehensive of hospital only) cover your costs in one of two ways:

  • The first way itemises the types of procedure you’re covered for and pays up to $X for each part of the procedure. For example: you had surgery A so no more than $4000 (if it was surgery B it would have been no more than $6000) plus anaesthetists B so no more than $2500 for that plus theatre time no more than $3000.
    Doing it this way can be confusing but its also real easy for actual costs to be more than what the plan covers if the insurer doesn’t adjust the limit every so often (and why would they?). Guess who has to stump up with any shortfall? Yep, you.
  • The second way is to pay your medical costs whatever they are up to a maximum of say $200,000 per condition. In other words you get treated and hand the bill to your insurance company.

The funny thing is that the comprehensive plans often calculate what they pay according to the first way, which makes the case against them even stronger. Hands up if you want pricy and confusing?

Before you rush out to change plans…

I can understand why you’d want to. God knows I did the same many moons ago. But before you go changing you need to realise that the new insurer may not cover any pre-existing health issues that you know about or suspect. That is they may cover you for everything except that dodgy knee you’ve got (an exclusion). Or because your BMI is a bit squewiff they might charge a bit more for the whole plan (a loading). It might be that they offer you cover with an exclusion that can be reviewed after a period of time.

Its hard to get more specific than that as the combinations are almost endless but suffice to say getting some advice is key if ‘pricey and confusing’ is not your cup of tea.

For more informaiton regarind you Health Insurance needs please contact a friendly Auckland broker today?


About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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