1493011087869 - Health insurers call for action on skyrocketing health costs

Health insurers call for action on skyrocketing health costs

The Government’s next job after raising the superannuation age should be tackling the rising cost of healthcare, a health insurance heavyweight says.

Roger Styles of the Health Funds Association (HFANZ) said the ageing population and the rise of new and costly treatments have made New Zealand’s health spending one of the fastest growing in the OECD. 

Treasury had repeatedly advised the growth was unsustainable, Styles wrote in a recent blog.

Superannuation costs were forecast to increase from 5 per cent to 7.9 per cent of economic growth by 2060. 

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But public healthcare costs were projected to jump 9.7 percent of GDP or $8 billion over the same period.

That level of shortfall would be hard to come up with by simply making efficiencies.

Increased user charges, greater rationing and longer waiting lists were all likely to be needed in the coming years, but they too were unlikely to match the shortfall.

“It won’t be able to raise the age of eligibility for surgery, and it will have to act before 2040.”

Styles said about a fifth of current health costs were funded privately, and he believed health insurance could be help relieve the pressure on the public system if there were fewer disincentives.

One option was the workplace. Styles said half a million Kiwis had health insurance through work schemes but fringe benefit tax deterred some employers from taking them on.

“That number could be much higher if FBT was removed, he said. 

“There are other ways we can encourage employers to fund health insurance for their staff that are worth taking a look at, and the industry is keen to have a dialogue with the Government about those.”

But Labour’s health spokesman David Clark said giving tax breaks to those who already had health insurance was not going to help.

The real solution lay in addressing public funding, he said.

Labour’s figures showed $1.7 billion of core Crown health spending had been stripped out in the last six years, due to inflation and demographic changes.

“It all has to do with cost and affordability and the way to ensure those people get the healthcare that they need is not to give a bigger subsidy to those who can already afford it.” 

A study in the New Zealand Medical Journal recently estimated 25 per cent of those surveyed were not easily able to access primary health care and 9 per cent had not been able to get into secondary care.

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