For a lot of people this benefit, or what is referred to as a base hospital plan, is the key reason they have medical insurance and it forms the foundation of most medical insurance plans.

Primarily our health system for primary and minor condition health management is very good, it's when you need a hospital that costs get expensive quickly. With stories of $60,000 cardio bills, $180,000 chemotherapy costs and waiting for years to get hips and knees fixed, people are rightly concerned about getting access in a reasonable time and at a reasonable cost.

Hospital cover, of reasonable cover, will give you limit of $2-300,000 per person per year for surgical and another chunk of a similar size for non-surgical hospitalisation. This is for private hospital costs. With minor surgical procedures costing $3-5,000 and typical larger claims in the $20-40,000 range there is plenty of coverage. The very large claims indicated above do happen but not as often as the lower cost claims. I have had one claim that was estimated at $42,000, after complications and follow up, it increased significantly to $94,000, and sometimes there are surprises. Good medical cover will cope with this so you don’t have to.

Public Hospital Grant

Public hospital admission costs are usually excluded, though a number of policies do pay a daily amount for the inconvenience of spending more than 3 days in a public hospital. Often this is a nice surprise for those who have spent a bit of time in a public hospital, as there are costs that do come with a public hospital admission too.

Major Diagnostics

Major diagnostics is another area that a good plan should have separated. This is due to the expensive nature of these tests and to protect the value of your surgical benefits. With some providers, we have up to $200,000 of coverage just in this area per person per year.

Non-Pharmac Coverage

The one area that has become important to policyholders in the last 5 years is non-Pharmac medicine coverage. This is where the government does not fund the medicine, and becomes your personal cost if you need it. In the last 4 years we have gone from only 1 provider to now having 4 providers offering non-Pharmac medicine cover on their policies, with another offering it only for cancer treatment. This has been a substantial change; though with 3 of those providers it is only offered with their most expensive plans. The other half of the medical insurance providers do not cover non-Pharmac medicines. It pays to get advice in this area so you have no surprises.

Australian Coverage

Secondary to non-Pharmac cover, the next most asked question is 'Am I covered in Australia?' Australian coverage has crept into plans over the last few years as well. Given the number of Kiwis who have moved across the ditch, it is a valuable benefit worth considering in your plan. Again, it is provider dependant, as not all providers will include cover in Australia.

Medical Tourism

Another benefit that has interest, particularly with the immigrant community, is what is best described as medical tourism. This is where you choose to have your surgery done overseas and have a holiday while you are there. Provided the costs are within the policy rules, this can all be paid for. With immigrant policyholders, this can be a valuable benefit, as it allows them to travel back to their home country for their treatment and have their family support around them while they recover. This is often undervalued until you go through surgery and recovery.

What's expected on your base hospital plan

There is a range of other things that a good plan will include, to be fair those that are worth considering have them all. These are:

Home nursing benefits, overseas treatment when it's not available in New Zealand, automatic coverage for new babies, excess options to manage premiums and share the cost, transport costs (between private facilities) and some death benefits if a policy holder passes away. The death benefits are of a nominal value to help with funeral costs, usually if the person was of working age.


The final consideration with your medical policy are the exclusions, most are consistent across all providers. The list of exclusions will determine how good your cover really is, it is also a good way to gauge what is covered. It may be counter intuitive, but understanding what isn't covered will determine what is covered.

For medical cover it is too hard to list every condition that could be covered, it is much easier to list the situations that are not. This for you as the policyholder does make reading your policy document a little challenging. Especially when you have to reference the policy glossary of terms to understand what it says as a word in the policy may not mean what you think it does.

Reading the list of exclusions is important. Expect treatment for psychology conditions, sleep disorders, obesity, snoring and sleep apnoea to be excluded from most policies. Some policies will cover sleep apnoea treatment, but only after diagnosis, meaning you're going to have to pay $2-3000 for the testing before you will know if you're covered. If you do not have it then you will still be out of pocket, which is why other providers just exclude it to avoid the whole is it in or is it out debate.

We have had the experience with a client; ‘Yes it’s sleep apnoea’ by the sleep specialist, only to find it is not once the sleep testing was done. An area that needs attention if you have concerns about this particular condition, have a chat with us about it to ensure you are getting the right policy.

Next - Medical treatment & costs incurred while traveling

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