Media release from Health Funds Association of New Zealand

The number of New Zealanders covered by health insurance in September was virtually unchanged from the previous quarter, according to data released today.

The overall decline in lives covered over the past four years was around 3 percent, with total lives covered now 1.349 million. Annual premiums grew 6.2 percent in the September year, while claims paid increased 4.8 percent on the previous year.
Health Funds Association chief executive Roger Styles said the vast majority of people were retaining their health insurance.

"People want peace of mind, and at the moment there is growing acknowledgement that the public system is not going to meet people's expectations in the coming years," he said.

He maintained that health insurance would play an increasingly important role in New Zealand's healthcare going forward, as the public system was increasingly unsustainable.

"Financial pressure from an ageing population is already putting the squeeze on the public health budget and demanding spending cuts. Roll that forward a few years and New Zealand has some tricky choices about rationing, cuts, and user charges," he said.

"There needs to be an open debate about future health funding. We need a long-term strategic plan outlining the direction and realities of funding, rather than ad hoc decisions, which do not give people time to plan or adjust.

"The only certainty looking forward is that people are going to have to pay a greater share of their own health costs," Mr Styles said.

ENDS (Three-page statistical summary follows)

For further information, contact:
    Chief executive Roger Styles   ph 04 499 0834 or 027 480 0072
Media advisor Andrea McKay   ph 027 555 7783.
 
Health Insurance Statistics September 2012

This is a quarterly supplement providing statistical information for the health insurance industry in New Zealand. It contains data on the most recent quarter, ended September 30, 2012.

•     Lives covered stable for September quarter

The number of lives covered was virtually unchanged in the September quarter (-600) at 1.349 million. For the 12 months ending September 30, 2012, the number of lives covered fell by 10,900 or 0.8 percent.

The past three years from September 2009 to September 2012 has seen a decline of 43,000 lives covered, or 3.1 percent.

•     Lives covered by age

A breakdown of the lives covered by age group indicates the reductions have been spread across most age groups. The largest reduction during the year has been in lives covered among those of working age. The decline in coverage for those aged between 35 and 59 accounts for over two-thirds of the total reduction across all age groups.

The table below shows the overall movements for the year for each five-year age band.

Table: Lives Covered by Age group: September 2011 and September 2012

Age    Sep
2011    Sep
2012    Change    Percent
0-4    65,760    64,841    -919    -1.4%
5-9    80,320    82,000    1680    2.1%
10-14    86,735    85,436    -1299    -1.5%
15-19    92,494    89,978    -2516    -2.7%
20-24    77,908    77,194    -714    -0.9%
25-29    67,167    67,047    -120    -0.2%
30-34    79,819    80,252    433    0.5%
35-39    100,745    97,463    -3282    -3.3%
40-44    117,643    117,305    -338    -0.3%
45-49    123,137    120,083    -3054    -2.5%
50-54    122,284    122,296    12    0.0%
55-59    110,047    108,902    -1145    -1.0%
60-64    97,570    94,698    -2872    -2.9%
65-69    58,397    60,836    2439    4.2%
70-74    35,781    36,979    1198    3.3%
75-79    20,381    20,239    -142    -0.7%
80-84    14,061    13,673    -388    -2.8%
85-89    7001    7073    72    1.0%
90+    2345    2436    91    3.9%
Totals    1,359,969    1,349,089    -10,880    -0.8%

•     Premiums paid up 6.2 percent

Health insurance earned premiums in the September 2012 quarter were $275 million, up slightly on the $271 million for the June 2012 quarter. Premium income for the full year ended September 30, 2012, totalled $1083 million, an increase of $63 million or 6.2 percent on the $1020 million in premium income for the September 2011 year.

Increased premium income reflects adjustments following rapid growth in claims costs over recent years.

•     Claims paid up 4.8 percent

Health insurance claims paid in the September 2012 quarter totalled $229 million, the highest ever recorded for a quarter, ahead of the previous record claims paid of $225 million in the September 2010 quarter.

Claims paid in the 12 months to September 2012 totalled $863 million. This is an increase of $39 million, or 4.8 percent, on the total claims paid in the 12 months to September 2011. 

Growth in claims costs has been running at a high level over recent years due to increased demand, expansion of services funded, and medical inflation, although the rate of growth has slowed in the last year or two, mainly reflecting the fall in lives covered.