Surprise jump in health insurance coverage, claims

October 22, 2008
MEDIA RELEASE – FOR IMMEDIATE USE

Surprise jump in health insurance coverage and claims - HFANZ

Health insurance coverage has shown resilience in the September quarter with modest growth in lives covered, despite deteriorating economic conditions, according to the Health Funds Association (HFANZ).

Health insurers recorded an extra 5500 lives covered in the three months to September 30, 2008, an increase of 0.4 percent bringing the total number of New Zealanders with health insurance to 1.395 million, HFANZ executive director Roger Styles said today.

“There was an expectation of a reasonably flat quarter, following a slowdown in growth in the June quarter and the economy going into recession. So the increase is a bit of a surprise,” he said.

In the 12 months to the end of September, 13,500 more people took out health insurance policies, representing 1.0 percent growth on the September 2007 year. Significant gains were noticed in the 60-64 age bracket, where the number of new policies grew 6.6 percent in the year.

Claims paid in the last year jumped 12.6 percent to $676 million – an increase of $76 million on the September 2007 year’s $600 million in claims. Mr Styles said tightening up of access to elective surgery in the public sector was a significant factor, leading to higher usage of the private sector. He also cited continued increases in healthcare costs which have been running ahead of general inflation rate in recent years.

“The CPI data out yesterday showed hospital costs had risen by 7.1 percent in the year to September,” he said.

Despite the increase in coverage this quarter, Mr Styles said the immediate outlook remained relatively flat, which could cause greater pressure on public hospitals.

“Because the private sector funds around 60 percent of elective surgery, people with health insurance are relieving significant pressure from the public system. If health insurance growth continues to slow or even dips slightly, the pressure on public hospitals is likely to get much worse,” Mr Styles said.

ENDS. (Three-page statistical summary (PDF) attached.)

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