Health insurance

When baby arrives, your health suddenly seems a lot more important. When you're starting a family, it's quite natural to start thinking more about your health and wellbeing and how you'll keep your children healthy. So we asked New Zealand's largest health insurer, Southern Cross Health Society, for some pointers on health insurance for new families.

With a family:

• More people depend on you to be fit and well.
• You'll want to get medical treatment as soon as it's needed.
• There are more of you, so you'll potentially be paying for more medical treatment.
• Your budget probably can't cover large unexpected expenses.

Health insurance can mean avoiding public waiting lists
As New Zealand resident or citizen, if you need emergency treatment a public hospital will provide it for you. But if you don't need immediate treatment, you'll be assessed by the public health system and wait-listed for elective services. This could take months or even years.

For non-emergency treatment, such as getting grommets for your child (for recurring ear infections), health insurance can help you and your family get the treatment you need.  

Health insurance protects your budget
Elective surgery can be very expensive. It's not the sort of thing young families can normally afford. That's why it pays to think about health insurance for you and your children.  

Health insurance and pregnancy-related costs
If you are a New Zealand resident or citizen you are entitled to free public healthcare when you're having a baby, so most health insurance policies don't cover these costs. 

Most Southern Cross plans offer an obstetrics allowance if you've had 1 year or more continuous cover. Here are some examples:

• UltraCare (up to $1,000 per claims year)
• Wellbeing Two (up to $750 per claims year)

This allowance means you can be reimbursed for expenses from an obstetrician/ gynaecologist, anaesthetist and accommodation in an approved facility, up to the specified amount.

Choosing a health insurer
First, check if your employer or your partner's employer offers a subsidised health insurance scheme. 

If not, you can research health insurers and plans online. It can also help to phone a health insurer or adviser.

Getting health insurance when you have a health condition, or have had one in the past
If you already have a health condition when you apply for health insurance, this is called a "pre-existing condition". You would not generally get cover for it, as health insurance is primarily intended to cover treatment for conditions that arise after the policy has been taken out. That's why it's a good idea to take out health insurance before you need it.

When to get health insurance for your baby

• As soon as your baby is born you can add him/her to either parent's policy.
• If you don't already have health insurance, you can take out a policy for you and your baby at the same time.
• Your baby will need to be on the same policy as one of its parents.

Tip: If you add your baby to your Southern Cross policy before he/she is three months old, Southern Cross may cover some pre-existing conditions. For example, if your baby gets an ear infection at two months old and later requires grommets, Southern Cross will cover it.  

How do you choose a plan?
There are two main types of health insurance plan.  An insurer might have policies that offer varying levels of cover between the two.

• Major medical plans - for hospital and specialist cover only.  These plans generally cover major medical expenses (operations and specialists), but don't cover day-to-day health costs.
  
  Example: A popular Southern Cross plan in this category is the Wellbeing Two plan. It offers major medical cover with the option of adding modules for day-to-day care, dental and vision, and body care.
• Comprehensive plans - for a wider range of cover. These plans cover the major medical costs plus day-to-day health costs such as doctors visits, prescriptions, dental, optometry.
  
  Example: The most comprehensive Southern Cross plan is the UltraCare plan. It offers high surgical cover and day-to-day benefits.  

What to consider when choosing health insurance
The cost of your health insurance will depend on things like how many people are included, what it covers and the excess (if any). An excess is the amount you have to pay towards the cost of each insurance claim. Choosing a higher excess usually means you'll pay a lower premium.

You should shop around, because some insurers are more family-friendly than others. For example, with Southern Cross you'll only pay for the first two children on your policy - the rest are free. A child is under 21 years old.

Low claims rewards are another thing to ask about when you're choosing your health insurer. For example, if you don't claim or your claims are below a certain level, Southern Cross offers a low claims reward after two years of membership.

You need to be confident that when the time comes to use your health insurance, your claim will dealt with promptly and efficiently.

Here are some things to consider.

• What is the insurer's reputation for paying out claims?
• How good is its customer service?
• How long has it been in business?
• How financially strong is it? 

Tips

• Talk to your friends. Find out who they are insured with and what their experience with that insurer has been like.
• When you're comparing prices, ask for a quote for your age now and when you're older. You'll find some insurers continue age-related premium increases when you're over 65.
• If you're buying through an adviser, ask how much commission they receive from each health insurer. Commission rates can vary considerably. Some advisers might speak more favourably about a health insurer if it pays them a larger commission. You should ensure you are buying the right policy for you, not the policy that pays the adviser the highest commission. 

To find out more

• Call Southern Cross on 0800 100 777, visit southerncross.co.nz/society, for a free quote.
• Download the Health Funds Association of New Zealand's brochure 'Making sense of health insurance'(PDF).