Rising health premiums hurt budgets

One older Southern Cross policyholder was stunned when he and his wife received a New Year increase of 19.7 per cent on their health insurance premium.

It would have been a 33 per cent rise, except for the not-forprofit insurer applying a noclaims discount.

‘‘We are stunned,’’ said the man, who asked to remain anonymous, fearing being ‘‘blacklisted’’ by the insurer. ‘‘How are pensioners able to cope?’’

The 65-year-old’s monthly premium went from $135.69 a month ($1628.28 a year), to $161.24 ($1934.88 a year).

Once his younger wife’s premiums were taken into account, the monthly cost rose from $251.88 to $301.48 a month.

The annual premiums are now $3617.76. Last year, they were $3022.56, a rise of just under 20 per cent. ‘‘We cope ... barely ... this insurance is luxury for us. It’s the single biggest item in our monthly budget,’’ the policyholder said.

The insurer said the premiums policyholders were charged rose as they aged because the likelihood of their lodging claims increased.

Over-65s made up 13 per cent of its membership, yet accounted for 36 per cent of claims costs.

It also insisted it never ‘‘blacklisted’’ policyholders, who are the owners of Southern Cross, which is a friendly society.

The man said that increasingly, the couple were the only people in their circle of friends still paying for health insurance.

‘‘If we ask around in our circle of Kiwi friends, none of them ‘poor’, ... I think we are the only ones with health insurance,’’ the man said. When their friends heard what they were paying, they shook their heads, he said.

‘‘This increase – 33 per cent without the no-claim discount – is the biggest Southern Cross increase ever in 25 years, if I remember correctly.

‘‘This pushes us seriously. This might be the last year.’’

In the letter announcing the premium rise, Southern Cross said: ‘‘When we review premiums, we consider aspects such as changes in the healthcare environment – including the increasing number and cost of claims. And because there’s generally a need to claim more often and for greater amounts as we get older, premiums increase with age.’’

The man doubts his ability to keep paying. ‘‘If this insurance keeps going up by ‘only’ 10 per cent per year, then it’s going to be $780 per month in 2030,’’ he said. ‘‘And this is the most basic insurance.’’