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10 Misconceptions about Health Insurance
1. “The Public Health system will look after me.”While this statement may have been true 5 to 10 years ago it is often not the case today. The priority of the public system is to treat acute (emergency) situations. If your procedure is categorized as elective you will go through an assessment process to determine if you qualify for treatment or surgery in the public system – a process that could take months, even years.
2. “It’s too expensive.”
At Absolute Insurance we believe protecting your health is not an expense it’s an investment. Protecting a whole family could cost as little as $2 to $3 a day. Part of the service an Absolute Insurance Adviser provides is helping you identify what type of health insurance policy best suits your needs, your circumstances and your budget.
3. “I don’t need health insurance.”
None of us know which health problems will affect us, or how they will impact on our lifestyles and earning abilities. Health insurance protects you against the unpredictable variations in your health costs. The Sunday Star Times March 18 2007 wrote an article on bankruptcy and listed “the five main causes of people going broke”.
They were:
| Job loss | |
| Excessive use of credit | |
| Relationship breakdown | |
| Ill health & lack of health insurance | |
| Standing as guarantor |
4. “I’m healthy—I’ll wait till I need it.”
If you purchase health insurance while you're healthy, you will be covered for health problems that you may have in the future. Some conditions may never be covered if you purchase health insurance after they are evident. This concept is not dissimilar to purchasing insurance for your car after you have had a crash.
5. “I’ll self-insure.”
Because none of us know which health problems will affect us in the future, or how they will impact on our lifestyles and earning abilities, we are often unaware what the actual costs will be.
Some examples of actual claims:
| Hysterectomy & Pelvic Repair | $30,632* | |
| Deep Vein Thrombosis | $21,365* | |
| Single Valve Heart Operation | $45,918* | |
| Spinal Fusion | $51,739* | |
| Brachytherapy for Prostate | $32,213* | |
| Colon Cancer | $45,147* |
Indicative costs of procedures:
| Heart Bypass | $25,000 - $65,000+ | |
| Hip/Knee Replacement | $13,000 - $20,000+ | |
| Cataract Removal | $2,600 - $8,000+ | |
| Varicose Veins | $6,000 - $8,000+ | |
| Hernia Repair | $5,000 - $7,000+ | |
| Tonsillectomy | $5,000 - $8,000+ |
It is often more prudent to self insure by owning a health insurance policy that allows you to include an excess (share in a portion of the procedure). It is a lot easier to find a $500 or $1,000 excess than it is to find $20,000/$30,000/$40,000 for an operation.
6. “My work has me covered.”
That’s great, but it’s often a packaged deal and may not suit your unique needs & circumstances. Two questions to ask yourself are “Do I plan working for this company for the rest of my life?” and “What happens to my health insurance policy when I no longer work for this company?” If your health insurance policy finishes when you finish work you could end up in a position of having developed certain health conditions that will not be covered by a new insurer.
7. “I have a pre-existing condition—I can’t get insurance.”
Not all pre-existing conditions are excluded. While major conditions such as heart, cancer, hip, knee and back conditions may never be covered there are some very good policies on the market that will include most other pre-existing conditions and a short stand down period. As a brokerage Absolute Insurance has been very successful in helping many of our clients get their pre-existing conditions covered.
8. “If I get cancer I’ll get immediate treatment in the public system”
Most cancer treatment is categorised as elective. To get public hospital treatment for an elective procedure you will be assessed to determine whether you qualify then you will be put on the waiting list. In a recent newspaper article Colin Calcinai, President of the Plastic Surgeons Association stated “Our concern is that the public has no idea of the magnitude of the problem. It is wrong for the public to think that just because they have cancer they will get treatment” 1
9. “I’m too old.”
Unfortunately it’s a biological fact that as we age our body deteriorates. Accidents & illness are a fact of life. Health insurance is as important for a newborn as it is for a senior citizen. The best time of life to take out health insurance is when we are young and free of any health conditions – the second best time to take out health insurance is before we get any older and develop any new health conditions.
10. “I’ve heard how the insurance companies try to get out of paying for the claims”
All reputable insurance companies will pay legitimate claims. The most common reason a claim is not paid is because the policy holder has not disclosed a pre-existing condition. Pre-existing conditions are health problems that exist at the time you apply for insurance. Absolute Insurance will only work with reputable Insurance Companies who have a good history of claims payment.
*Source: Actual claims paid by Tower Health & Life 2006/2007
+ Source: Health Funds Association of New Zealand - Indicative costs of procedures March 2006 (incl. GST)
1 Source: The Dominion Post Thursday June 15 2006