Insurance seen as health solution

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 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.

Public healthcare costs were projected to jump to 9.7 per cent of GDP by 2060 leading to increased user charges, greater rationing and longer waiting lists.

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.

But Labour’s health spokesman, David Clark, said tax breaks for those who already had health insurance would not 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 past 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.’’