How to avoid expensive health insurance hiccups
When our bodies break, it’s not always easy to get insurers to pay up.
Itore the letter from the DHB open with excitement. A specialist would be happy to see me—at some point in the next four months.
Having let my private health insurance lapse a couple of years ago, I was kicking myself. As always, hindsight is 20/20. Even if you do have insurance, the Insurance and Financial Services Ombudsman’s case notes include plenty of bad decisions, regrets, and crossed wires. All the names have been changed, but the situations are real.
PRE-EXISTING CONDITIONS
Mr Cross’ claim for a knee replacement was rejected, because he had suffered from knee pain 13 years earlier.
You’re meant to disclose any pre-existing conditions when applying for insurance or switching to a new provider, but it’s hard to remember every last detail, especially when the definition is so broad.
Even if you’ve signed a waiver letting the insurer check your medical history, they’ll generally rely on what you’ve told them – until it comes to claims time.
The safest approach is to attach your entire medical file at the time of application. You might be given a stand-down period for a certain health issue, or be told that it’s excluded altogether. Much better to find out straight away than get a nasty surprise.
AUTO-RENEWAL
When Mr Brown switched to a new insurer in 2010, he didn’t realise he hadn’t cancelled his old policy. He continued unwittingly paying premiums for six years. He took his case to the Ombudsman, but his complaint wasn’t successful. The insurer was within its right to keep charging him, until it received signed instructions otherwise.
Auto-renewal is generally a good thing, because it gives you continuous coverage. If you’re switching to a new provider, just be aware that the old policy is not automatically cancelled.
POLICY EXCLUSIONS
In 2017, Mr Roberts had his prostate removed but started experiencing erectile dysfunction after recovering from surgery. A specialist recommended that he have a prosthesis surgically implanted in his penis, and Mr Roberts asked his insurer for preapproval.
It turned down his claim, because his policy included a blanket exclusion for erectile dysfunction. He wasn’t covered, even though his issue was directly caused by the cancer surgery.
Every policy contains a list of various exclusions. The only solution is to read it carefully.
APPROVED MEDICINES AND PROVIDERS
Ms McNamara suffered from a condition in which her armpits perspired uncontrollably – something that could be solved via Botox injections.
McNamara’s insurer of 18 years wouldn’t pay for the treatment because her policy covered only medicines listed in the Pharmac schedule – even though the same treatment was covered under the company’s more recent policies.
This sort of clause is especially important for the likes of cancer drugs, which can be hideously expensive if they’re not on the Pharmac schedule. Some top-end insurers will cover the cost of these drugs, while others will only make a contribution towards their costs, or won’t cover them at all. Again, you have to look into this carefully. The cheapest policy is not necessarily the best policy.
Kiwis are pretty lucky to have a functioning public health system and a no-fault accident insurer. But if you want to take out private medical insurance too, good for you.
Just make sure you don’t spoil your careful effort by failing to dot all the i’s and cross the t’s.