nib: government has no appetite for tax breaks for health ins premiums
Health insurer nib New Zealand doesn't think the current government has any appetite to provide tax breaks for health insurance premiums.
Friday, April 5th 2024, 8:34AM 
1 Comment
by Jenny Ruth
However, both it and AIA New Zealand say they would be ready to work with the government to improve health outcomes for Kiwis.
“There has to be appetite from the government to go that way. And we don't see that,” a nib spokeswoman said.
AIA NZ chief executive Nick Stanhope says the health system is facing “some big challenge” as the aging population grows.
“New Zealanders are increasingly needing support to manage their everyday health and wellbeing as well as respond to health issues which might arise,” Stanhope says.
“At AIA NZ, we believe [the] private sector can work together with the government to help improve health outcomes for New Zealanders and relieve pressure on the public health system,” he says.
“For example, we can see the value in improving and incentivising access to private health insurance to help take the load off the public system and ensure it has capacity for people who need it most.”
Stanhope says as one of the largest life insurers in the world, AIA is well-placed to explore what works well in other markets.
He says an approach to encourage people to make lifestyle improvements and take preventative measures is also something AIA can help with.
Newly appointed nib NZ chair Hanne Janes says that “there is certainly huge strain on the public health system and innovative ways need to be investigated to change access to health delivery, improve outcomes and innovate in the area of funding.
“nib is committed to working with government and third parties to try to identify what can be done differently.” nib is sponsoring the NZ Initiative's health summit scheduled for August this year.
A 2014 paper by NZIER found that making health insurance premiums tax deductible would probably create “a fiscal hole” for the government because the cost of subsidising those who already have health insurance would likely outweigh any benefits.
However, that paper looked at a range of measures that could be adopted by the government, including levying those with high incomes who don't have private health insurance or using an employer-based system which automatically enrolled employees into a health insurance scheme but allowed them to chose to opt out, in a similar fashion to how KiwiSaver works.
GoodReturns asked both Southern Cross and Partners Life to comment on whether NZ should make health insurance premiums tax deductible but received no response.
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Taking pressure off the public system having private hospitals conducting more elective procedures must assist the public system.
There is a sensible conversation to be had and that conversation should not be muddied by some insurer trying to promote preventative marketing plans. A 68 who is paying $9,000 per year premium is not going to put on a fitbit and do star jumps to try save a few dollars in premium. Tax relief is what that person would benefit from and that is the discussion.
The same discussion has helped us market Income Protection over time.
On many occasions we claim Income Protection premiums which could save folk from landing on a sickness benefit, there must be some way that some tax relief can be calculated on private medical insurance that can make sense.
A focused, sensible discussion that especially considers the aged who are having to give up their plans because of premium cost is a major issue. This continues to happen at a time when they most need the cover, this should be the focus. I do not feel looking overseas is required, this is a local issue and it needs to be kept focused and simple.
Also perhaps another discussion with the Commerce Commission about medical plans that are still being marketed that can result in clients paying premiums for medical plans that could end up with major short falls in funding treatment this resulting in clients having to get public treatment.