Health insurance

Is health insurance worth it in New Zealand?

New Zealand has a publicly funded health system. If you have an accident, you’ll probably be covered by the Accident Compensation Corporation (ACC). If you get sick, the public health system will help you, but you may have to wait a while to be seen. Health insurance helps you access health care faster.

How long a person is willing to wait for their health issue to be dealt with by the public health system has typically been a key factor in the decision to get health insurance. However, wait times in the public health sector and the cost of health insurance have increased significantly. At the same time, consumers are struggling with cost-of-living pressures.

The stakes of being a ‘have’ or a ‘have-not’ in terms of health insurance – have never been so high. So, do you need it?

Do you need health insurance in New Zealand?

If you’re considering taking out health insurance, ask yourself the following questions.

• Can you afford to put aside savings just for medical bills? If the answer is yes, you’re most likely better off without health insurance, providing you don’t need to pay for major elective medical treatment when you’re younger.

• Can you afford to pay for doctor’s appointments? If the answer is yes, it’s probably not worth paying higher premiums for comprehensive cover. Likewise, if you can afford the premiums for budget policies that only cover general practitioner (GP) visits and other primary healthcare, such as prescriptions, then you can probably afford to pay for doctor’s appointments yourself.

• What are your chances of needing major surgery? Diet and exercise are vital factors in maintaining health and reducing the risk that you’ll need medical treatment. Making lifestyle changes may do more for your health than health insurance.

• Can you afford to pay for surgery if you don’t make it onto a public hospital waiting list? According to the company Southern Cross Health Insurance, a procedure like a hip replacement can cost $26,200 to $36,200. Can you afford to pay that much? How much income could you lose if an untreated condition stopped you working?

Types of health insurance cover

Minor medical health insurance: Also known as day-to-day cover, minor medical health insurance covers everyday medical expenses. These policies might cover a few trips to the GP each year, some of the cost of seeing a specialist or getting a flu jab, but they won’t cover the cost of surgery.

Major medical health insurance: Major medical health insurance policies cover elective surgery, major treatments and specialist visits, but they won’t cover day-to-day medical expenses.

Comprehensive health insurance: Comprehensive health insurance policies are a combination of major and minor medical coverage policies, covering both major surgery and day-to-day expenses.

Note: Policy limits, the period of cover following a medical incident and the cost of premiums vary significantly across policies and providers.

Our health insurance premium price survey looks at the cost of and what’s included in comprehensive and major medical insurance policies.

The most common treatments covered by health insurance

Southern Cross Health Insurance is New Zealand’s largest health insurer. In our 2024 insurance survey, 64% of respondents were covered by this insurer.

The most common claims made by Southern Cross Health Insurance customers are for:

1. GP visits
2. physiotherapy
3. specialist consultations
4. imaging scans
5. prescriptions.

Medical treatment costs

Southern Cross Health Insurance also outlines some indicative costs of common medical and surgical procedures. Costs are GST inclusive and sourced from 2023/2024 claims data. If you’re thinking about self-insuring, these are some of the costs you might need to cover.

Conditions commonly excluded from health insurance policies

When you’re looking to take out a health insurance policy, it’s important to understand what that policy won’t cover. Some of the health issues excluded from base policies include:

• allergies

• dementia

• infertility

• pregnancy

• mental health

• obesity

• vision correction.

Some health insurers allow you to add cover for such issues as an optional extra. Additionally, some treatments within these exclusions can be included as loyalty benefits. For example, after a few years of continuous cover, you may qualify for cover for pregnancy or surgical procedures to treat obesity.

There are similar caveats when it comes to dental care. Most health insurance policies cover oral surgery under their surgical benefits, but there are a range of qualifiers and exclusions.

• Some policies will add oral surgery cover after a period of continuous cover.

• Some policies cover oral surgery but exclude extraction of poorly maintained teeth and implants.

Our health insurance comparison outlines what is excluded from each policy.

Pre-existing conditions

When you purchase health insurance, before your cover begins, you will be asked if you have any pre-existing conditions.

Insurers may consider covering a pre-existing condition under the terms of a policy if they assess the risk as being low. If they don’t, you will probably still be able to purchase health insurance, but your pre-existing condition may be listed as an exclusion on your policy.

What to ask when researching health insurers

When researching health insurance policies, there are some key questions to check.

• Does the policy exclude relatively common procedures or medical conditions?

• Does the policy have treatment limits per procedure or year?

• How generous is the policy about scans and investigative procedures?

• Can you claim if these procedures don’t result in hospital treatment?

• What types of minor surgery will the policy cover?

• Will the policy pay for non-Pharmac-funded drugs?

• Does the policy allow for home-based nursing for post-operative care?

• Will you be able to claim post-operative physiotherapy?

• Will the insurer allow you to go overseas for treatment?

• Does the policy cover your children from birth – and until what age?

• Does the policy cover any pre-existing conditions after a stand-down period?

• Can you cost share, or is there a good trade-off between taking a higher excess for each claim and premium reduction?

Our comparison of different policies' health insurance coverage answers some of these questions.

How to make a claim

1. Go to your doctor

If something goes wrong with your health, the first thing to do is to go to your GP. Minor medical or comprehensive health insurance will cover this visit, and you might want to make a claim.

If you need to see a specialist, you’ll probably want to use your health insurance to pay for it – that’s what it’s there for. Some insurers will have preferred clinics, so it’s best to ask your GP for an open referral so you can use your insurer’s preferred option.

2. Contact your health insurer

Make the conversation with your health insurer as easy as possible by collecting the information your insurer is likely to ask for before you start. This includes:

• your policy details, including policy number

• your bank account details

• the specialist’s report and estimates of costs if treatment is required

• details of your treatment, including invoices and receipts

• ACC’s decision letter, if applicable.

Confirm you have your health insurer’s prior approval

While insurers will approve most claims, you can remove some of the uncertainty from the process by getting their approval before you begin treatment.

• Some insurers recommend prior approval for procedures above a certain threshold.

• Some medical providers want to see proof of prior approval before administering treatment.

3. Your health insurer approves (or rejects) your claim

The health insurers in our survey generally approve claims within 5 to 8 business days, and most claims reported in our health insurance survey were approved.

Once your claim has been approved, your insurer will take care of your treatment’s costs. Bills should be settled between your insurer and the healthcare provider. Your insurer should reimburse you for any expenses from early in your treatment journey – such as for a scan you paid for yourself.

What to do if your health insurer rejects your claim

If you believe your claim has been unfairly rejected, call your insurer and explain why you believe you have been wrongly denied cover.

It’s good to put your complaint, and any of your responses to your insurer, in writing. If you’re not sure what to include in your complaint, check out our e-mail templates for engaging with insurance companies.

The Insurance and Financial Services Ombudsman Scheme has been set up to help resolve disputes between customers and their insurers. You can take your complaint to this service if your insurer won’t change their decision. It is free to raise a dispute with the scheme, and if it agrees with you, the scheme can order your insurer to pay out.

The cost of health insurance

Our health insurance premium price survey aims to develop an understanding of the cost of health insurance in New Zealand and what you get for your money.

We got quotes from six health insurance companies for a major medical or comprehensive health insurance plans, offering at least $300,000 of surgical care. We collected health insurance quotes with excesses of $0, $500 and $1,000 for a:

• 35-year-old male, 35-year-old female (single and as a couple)

• 55-year-old male, 55-year-old female (single and as a couple)

• 70-year-old male, 70-year-old female (single and as a couple)

• family of four.

In all our quotes, the individuals are non-smokers with no pre-existing health conditions. Where relevant, we’ve added healthy lifestyle and direct debit discounts, as well as any policy fees.

In addition to collecting information about premium prices, we also pull together the policy information for each policy. This allows you to compare the limits for different aspects of cover between different policies or insurance providers.

The findings are as you’d expect: health insurance is expensive, and the price goes up as you age.

One way to keep the cost of monthly premiums down is to increase your excess. However, if you set your excess at, say, $1,000, your insurance will still be good for covering any massive health costs, but you will have to pay for any costs below that threshold yourself.

Health insurance prices have increased

Health insurance has increased significantly in price since we last surveyed the industry in 2023. The figures in the bar graph below show the average quote we received in our health insurance premium price survey in 2023 and 2025. For quotes for specific policies, or to see the costs for different ages and genders, look at the comparison page of this buying guide.

Causes of price increases

There are three primary factors that have driven increases in the cost of health insurance.

• Medical inflation: This refers to changes in the price of healthcare, which, like other goods and services can increase or decrease over time. New Zealand has experienced very high medical inflation in recent years, driving up the cost of cover.

• More claims: As waiting times for public health services increase, people become more likely to make claims on their health insurance to have their health condition dealt with faster.

• Concerns about the public health system: As premiums rise, people at lower health risk are likely to give up their policies. The result is that the insured population becomes increasingly risky – and more expensive – to insure.

How to remain insured while prices rise

The price of health insurance has risen significantly, but with wait times in the public health sector increasing, you probably want to keep your health insurance. That gets harder to do as we age and our premiums increase even further. So, how can you remain insured while prices rise?

Increase your excess

Premiums get very expensive as we age. In our study, the average monthly premium for a 70-year-old with a $500 excess came to $547, compared to $109 for a 35-year-old.

As we age and our premiums increase, one way to manage this is to significantly increase your excess.

You could get health insurance to cover a worst-case scenario, rather than the costs you might incur on a monthly or annual basis. Increasing your excess will reduce your premiums while keeping your insurance for things like a major operation.

However, raising your excess needs to take into account what you can afford in an emergency.

Make sure your policy matches your needs

It’s important that your health insurance policy aligns with what you’re likely to claim for in the future.

A financial adviser can offer some good advice and make sure you’re only paying for the cover you need. Paying to see a financial adviser might have a short-term cost, but it could make your insurance more affordable in the long-term.

We've looked at whether you need a financial adviser, and the Financial Markets Authority have tips on how to find a financial adviser.

If you are engaging an adviser, ensure that they are on the Financial Service Providers register.