Managing medical expenses and avoiding waiting lists
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 on managing. Public health is an area where the government has the largest spend, ($15 Billion for 2015) which should be an indicator you need to consider your options here as well.
Our Medical Insurance Blog Section is a good place to start with understanding what is happening in this area
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 what your situation is.
- This article, Waiting lists are a form of rationing, discusses waiting lists.
- This article, Insurance coverage in New Zealand how will it affect you, discusses the impact of people having less private medical insurance and the pressure it creates on the public system. This article, Retirement Commissioner warns NZ Super changes needed in 15 years, evidences some of the things I have been discuss in the coverage in NZ article.
- This article, How do you insure your new baby, discusses insuring your new baby.
- The New Zealand Herald's 5 part series on Cancer, Breast Cancer, Bowel Cancer, Lung Cancer, Melanoma, & Prostate Cancer.
- this article, Pharmac funding do you really understand what this means?, discusses the role of Pharmac and how medicines are funded and what this means for you when they are not funded.
Get access quickly
In real terms medical insurance is about you 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 are not representing 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. The fact is 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 the GP and Prescription cover than they ever claim. Often because they pay for the insurance but don't bother with the claim. Probably better to spend the money on a good surgical policy and continue paying for GP's as they have been.
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 means these costs are contained.
Being one of the significant reasons you have medical cover. With a heart bypass currently costing between $35-50,000, finding $7,000 to $10,000 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. 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.
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 $15,000 and $200,000 per course, depending on treatment required and whether it is funded or not. Some medical policies don't cover the unfunded medications and our largest medical insurer has only a small contribution to unfunded medications at best. There are 5 insurers that will pay for unfunded cancer medications. You shouldn't have to get a mortgage on the house or fundraise to pay for this.
Unfortunately unless you have access to an employer medical scheme, getting cover for pre-existing conditions is unlikely. Being an existing known risk, the 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 if it is an existing managed condition, then this possibly isn't what you need to worried about, the two C's above probably are more important to focus on. With trauma policies on the market covering upto 60 conditions and paying around 95% of claims for Cancer, Cardiac, Stroke and Kidney conditions, the focus is more the severe end.
Medical insurance enables you to have your treatment done at a time that suits you. With the less life threatening procedures, this means you can manage your treatment within your lifestyle. Teachers are a great example, fortunate to have a large amount of time off in summer. Medical insurance claims for teachers spike once school is out for the year. Surgery is scheduled and completed in December with a good 4-6 weeks to work through recovery.
Do you want to go to the best cardiologist, do you want to avoid a trainee doctor under the specialist? With medical insurance you can. Yes in the public system you may be under Dr X but it is likely most of your care and treatment will be taken care of by their residents rather than them directly. With medical insurance you can be treated directly by Dr X. If your condition needs a specific specialist rather than a Dr consulting that specialist, you can get treated by them. If you need a second opinion, a lot of medical insurers now included provisions to pay for second opinions too.
You have the choice about venue for your treatment too. Within reason for availability and also where your chosen specialist or surgeon works.
Reasonable & Customary
All of this is wrapped up with reasonable and customary. This is insurer speak for what is reasonable for the costs of your treatment and the condition you have being treated. This is where working with your adviser to work through what is going on and getting prior approval is important, to ensuring you have no surprises or unexpected expenses.
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 step you through the options and discuss the pro's and con's in plain English.