Health system not helping income protection claims

Jon-Paul Hale's third of four articles on income protection; recent critique of the length and motivation for IP claims and how public health and IP don't collide well.

Wednesday, February 12th 2020, 8:00AM

by Jon-Paul Hale

The discussion on length and motivation of income protection claims is a profoundly nuanced issue – one where I have significant experience. Just last year I had 18-20 disability claims come across my desk, from ACC through to IP, and none were what I would call open and shut.

I’m also dealing with my own claim at present, too.

The issue of length and motivation is one mostly of frustration.

As I mentioned earlier, the impact of workers in the household also brings with it added stress. Something that is also reflected in our suicide rates and mental health disability claims. Stress in modern society is rampant, and it is often driven primarily by financial stress.

This is where mental health and income protection collide in unhelpful ways. When I was working at Sovereign, the stat was 40% of new claims were mental health related and 80% of long-term claims were for mental health. With a significant proportion of the long-term claims for mental health being a secondary condition to the original disability.

None of this is news, yet the research also conveniently misses this point.

All of this is compounded by the medical system, if you only have disability cover and you have to deal with the public health system alone, it can take months to get anywhere.

A case in point, a client with a stroke in June and no medical insurance. He only had the acute review for this four months after being discharged from hospital, and only after I got involved, found the neurologist appointment, negotiated with the IP insurer to pay for it, for it to happen. The public health call back still hasn’t happened as far as I am aware, this is seven months down the track.

Another client with a head injury took a few weeks to connect the knock with symptoms and start the process with their GP. The concussion clinic took three weeks after that to follow up and even then decided that a CT wasn’t required because the headaches experienced seemed to be resolving themselves.

We got the CT referred by the GP and done privately, to find that there are things on the CT that need following up. We’re now five months down the track, and there is a wait until March for the private specialist on this.

These delays in accessing treatment, and both of these examples ended up being private consults, are the primary cause of the increased duration of claims.

In both of these cases the public system has failed them, they are struggling to work but their situation is not severe enough to enter the public system through the emergency room doors.

And I have case after case after case like this, as will many of you out there. Many advisers will be looking at this going, "aha, I get it", as you have been managing claims but wondering what the hell is going on while listening to clients complain.

They are complaining that they are under increased stress, both financially and psychologically, due to the delays and lack of clear information from the medical system. These are not complaints about the advice or the insurance product, but the system we are forced to work within.

My own story is one where I have managed to get about nine months ahead of the usual private medical response, and the public system isn’t yet out of the starting blocks.

This access to medical treatment is a massive contrast. And it is the one causing all the pain with disability claims.

Does this put financial pressure on the insurers, sure does. But this isn’t as a result of the policyholder; it is the symptom of the system that puts the policyholder in that position. One I often refer to as the hurry up and wait approach.

Tags: Income Protection insurance Jon-Paul Hale Opinion