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Two important things to look out for when considering Health Insurance

Riskinfo NZ reveal that more younger Kiwis view health insurance as an important part of their financial and overall wellbeing. Approximately one in three customers with health insurance are under the age of 30. 

However, there are two key aspects to health insurance that most people don’t know about which should be factored in when considering which Health Insurance plan should be chosen. 

Factor 1: Access to non-funded drugs aka non-PHARMAC drugs: 

PHARMAC is a government agency which decides which medicines, vaccines and pharmaceutical products are subsidised for use in our communities and hospitals (i.e. the public health system). However, there are drugs that are not subsidized / unfunded by PHARMAC that are more cutting edge and effective - especially cancer treatments. These drugs are known as ‘non-PHARMAC’ drugs. 

Non-PHARMAC drugs are very expensive. Rounds of treatments can go well into the five – six figure range. An example of this is a drug called Keytruda. If an individual has non-small cell lung cancer and required treatment of Keytruda, it would cost around $10,000 per session.  

Having a health insurance plan with adequate cover for these non-subsidized drugs is really handy in situations where unfunded drugs are required. Having to pay for these treatments from your own pocket would mean having to sell assets, digging into savings or getting crowd funded such as  

Note that not all health insurance plans will cover non-PHARMAC drugs.  Some health insurance plans either don’t cover non-PHARMAC at all or provide minimal levels of cover (i.e. not enough). Ultimately, it comes down to what is and what isn’t covered under your Health Insurance plan. 

This is where a good insurance adviser is important – they will know which health insurance plans have adequate non-PHARMAC cover to cover situations where those unfunded drugs are required. 

Factor 2: Guaranteed wording 

Imagine signing up to a health insurance plan, only to get a letter saying that a particular benefit is being removed and there is nothing you can do about it?  

A concept/ benefit called “Guaranteed wording” prevents these sorts of situations. Guaranteed wording guarantees that once you hold a health insurance policy – the policy/ benefits cannot be altered in a negative way for as long as you keep that policy going. As soon as your health insurance policy goes into force, you have this guarantee. 

Very few health insurance plans have guaranteed wording in their policy wording. As a result, consulting an insurance adviser is highly advised when considering health insurance. 


The contents of this article are for information-only and may express the opinion of the writer. This article is not be taken as personalised financial advice, as everyone’s situation is different. Please always seek advice from a financial adviser before making any decisions with your personal and/or business finances.


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