Parliament will consider a NZ First proposal to get our aging population to contribute more towards paying for their own healthcare, to take pressure off the public system.
NZ First MP Barbara Stewart’s Affordable Healthcare Bill was yesterday drawn from the Members’ Bill Ballot. Stewart is suggesting:
- Parent category migrants are required to have health insurance when they arrive in New Zealand, and maintain it for 10 years.
- That fringe benefit tax (FBT) is removed from health insurance to incentivise employers to include it in a salary package.
- That the Government provides people over the age of 65 with a 25% health insurance premium rebate, up to the value of $500 a year.
The Bill explains, “Boosting uptake and retention of health insurance alleviates the burden on public health by freeing up resources and reducing waiting lists. Private hospitals already act as a backstop for public hospital overflow.
“Realistically, no government can fund all healthcare from tax revenue alone. The question is, what is the appropriate balance so the public share is affordable to New Zealand?
“If the Government does not stimulate higher voluntary levels of health cover, the consequence could be greater rationing of public healthcare and service cuts.”
NZ First points out that at 17% of total health spending, New Zealand’s private health spending is below the OECD average of 28%. It's also below Australia’s private healthcare spending, which sits at 32%.
Proposal #1: Insurance for migrants
Stewart wants to restrict the amount of taxpayers’ money spent on Parent Category migrants’ healthcare.
Parent Category migrants include people who are eligible to come to New Zealand due to their children being New Zealand residents or citizens for at least three years.
And by health insurance, Stewart means fairly comprehensive cover that includes elective surgery.
A lack of data collected makes it difficult to pin-point exactly how much the government spends on Parent Category migrants’ healthcare.
However, information released by the Ministry of Health under the Official Information Act shows $80 million of debt, created by unpaid medical bills from non-New Zealand citizens, was written off between 2007/8 and 2013/14.
The amount of debt, created by people who aren’t citizens or permanent residents, or people from countries with reciprocal healthcare agreements, that has been written off by the country’s district health boards has increased from $8.5 million in 2007/8 to $13.5 million in 2013/14.
In her Bill, Stewart argues, “Eligibility for health insurance, and the premium cost, will not present problems because these immigrants have to prove good health, reach high financial thresholds, and be self-supporting for a number of years.
“A health insurance requirement is consistent with most other countries for retirement visas.”
Proposal #2: Tax removed from health insurance
Stewart wants to see fringe benefit tax removed from health insurance, to encourage employers to include health insurance in salary packages.
FBT is a tax employers have to pay on the value of any additional benefits (like health insurance) they provide their employees.
Stewart says, “FBT on health insurance sends the wrong message to employers who wish to play a responsible role in their employees’ health arrangements.
“The removal will align FBT treatment of health insurance with accident insurance under ACC.”
Proposal #3: SuperGold health insurance rebate
Stewart wants the Ministry of Social Development to pay SuperGold card-holders a 25% premium rebate, of up to $500 a year, on their health insurance premiums.
She says, “The time when premiums escalate usually coincides with the time when income reduces.
“If it is more affordable for seniors to maintain their health insurance, they can have a greater choice of elective surgery and shorter waiting times.”
According to the online insurance quote website, LifeDirect, a 70-year-old man with no disclosed pre-existing health conditions, will pay between $3,250 and $4,270 for health insurance a year. This is with a $1000 excess and specialist and tests cover included.
It is likely most 70-year-olds will be paying much more.
Savings debated
The Health Funds Association of New Zealand, which represents health insurers, is throwing its support behind the Bill.
Acting chief executive, Chris Pentecost, believes any fiscal costs incurred by the Bill will be offset by savings in the public health sector over the medium term.
He points to a report the New Zealand Institute of Economic Research did for the Association earlier this year.
It found that increasing the number of workers covered by health insurance by 20% could save around $60 million to $110 million in lost output, because having their health issues dealt with privately meant they bypassed the public waiting lists, which on average stretched beyond seven months.
The Institute estimated 42,300 New Zealanders were prevented from participating in the workforce due to ill health in 2010 – a loss of 88 million hours of labour force productivity amounting to $1.8 billion, or around 1.2% of GDP.
49 Comments
There are many benefits to the NZ system however there are some downsides also. Many new drugs aren't available due to cost etc and many others are restricted. The public system doesn't even own a PET scanner. The private system owns 2 or 3. If you should get a PET scan then you get referred to the private system. It is still funded. More use of the private sector is one way of making more efficient use of our medical resources. I have had CT scans in both systems and unless you are actually admitted into hospital, the waiting list of them is much longer publically.
Many drugs aren't available because NZ no longer encourages Glaxo to be in NZ.
NZ refuses to let Big Pharma protect it's recipes and stripmine the sick and helpless for premium price medicine.
Cost from some items are very low because Pharmac uses taxpayer money to subsidise the non-returning medicine that people need, and has a buying group power to negotiate better prices and influence old stock dumping.
The last two paragraphs are a big reason that TPPA is being forced at New Zealand as a way to undermine our sovereign rights, in what is supposed to be a trade deal when NZ put TPPA on the table.
Nothing stops collectives to buy their own gear. (except the greater problem of disposable income in NZ)
The real problem is the outrageous _protected_ cost structure of medical care.
It is an _prevalent_ philosophy in the medicine profession that people will be willing to pay anything for their health so they can charge what they like and people will pay it. This cartel must be broken to bring prices in line with the economy - otherwise shifting the cost from public to private is just going to let the public services pocket more themselves (it won't reduce costs to the sick)
Do you mean 'Parent Category Migrants'? or migrants in general?
Because I'm a migrant and I certainly pay taxes.. In fact I pay taxes and I already came educated, vaccinated, with productive skills and ensuring my health was not a problem for NZ (health reports, etc.). It would be a little bit unfair not to grant us the same rights as any other New Zealander just because we didn't happen to be born here, don't you think?
And about other migrants, EVERYBODY, absolutely EVERYBODY pays taxes. Unless you talk about taxes on income, which some might not have one. But taxes are paid when consuming too. Do you know anybody who does not buy in shops, puts petrol in his/her car, pays for accommodation, etc?
If the root problem is that we think some come and without having contributed "enough" they get a big piece of the public sector let me tell you that's not a problem only among migrants. Actually migrants have to prove that their health is good in order to be granted a visa. If they happen to suffer an accident or get sick it's something that cannot be controlled and I'm assuming not very enjoyable for them either. What others that happened to be here already have to prove in order to get a piece of the public? Just the Birth certificate as if it's some kind of merit that gives them more rights to parasite taxpayers?
Of course it sounds very attractive the slogan "NZ for NZers" and point the finger at outsiders as an easy target for whatever issue comes up (it seems to be what NZ First does, and it will be successful as soon as we enter recession in NZ..)
Are there financial issues? Then why not to tax everybody equally and all the gains equally? Why to encourage speculation and why to tax someone's hard earned salary while not taxing someone's capital gain when buying and selling something more expensive without any added value?
If we go down that road and start making mandatory health insurance for some people why to do so only for some migrants? Why not to make it mandatory for obese people who can't/don't want to stop drinking sugar drinks and suffer diabetes, or people who hasn't worked a number of years, or people who drink too much, or.. at least those people really have the choice to be healthier or not.
I don't find it as the right thing to do, honestly.
I would assume the idiots who get drunk get their treatments paid by ACC! Same for the illegal drugs group!!
What about forcing the people who eat white breads and sugar which causes all sorts of health issues that clogs up our health system to pay? At the end of the day alcohol like white bread and sugar is legal...one gets covered by ACC the other public healthcare!
Then there is the pharmaceutical industry ......in the USA the equivalent of a loaded jet plane die each day from legal pharmaceutical drugs.......I don't know the stats for NZ but we use the same drugs so assume we'll have the same figures.....and who gets to pay for medical misadventure in NZ? ACC payments cover this!!!
The public system is pretty good at emergency level but after that it is pretty much like a Saturday night lotto draw and I don't want my tax dollars to be wasted on luck!!
What about people who develop cancer though no fault of their own? Like children. How much does their treatment cost? Could you really expect their parents to fund their own treatment when private medical providers inevitably screw them? Our public medical systemust not be compromised by these disgusting neo-liberal American policies.
work around them. don't buy into the "extended patent" bs.
the patent system is well due for an overhaul.
It's stated purpose was to _increase_ information sharing and industry and economic development.
The current system, especially with regard to advantaged US corporations - who use a different system of patents based on first to invent , rather than NZ's first to file system - and they rely on the legal system to make their profits. This is the anti-thesis of why that patent system was developed.
The patent system was developed so that developed property could be shared, without loss of IP rights of the owner, so that the IP could be shared at a reasonable price. Thus _increasing_ the ability of others to service and develop the market and produce further progress.
the current system clearly places a stranglehold via that law, preventing sharing, enforcing overly expensive prices instead of reasonable ones, and preventing the development of progress rather than enhancing it. Why? Because lawyers and governments like the "lobbying funding".
Under TPPA we would be even more vulnerable.
What about children? If you're going to have children then be a responsible parent and get medical/healthcare insurance......I have always had my kids covered with medical insured and they in turn are now insuring theirs!!!
I am paying taxes for the public system and taxes again on payments I make for my private medical insurance.....I then read every damn label on food packages, grow most of my own and make an enormous effort to stay away from carcinogenic compounds and not just the ones that our health authorities identify.
I think you are a closet socialist.......you want all the benefits of capitalism for yourself personally and then you want everyone else to cover healthcare costs that you or your family might have!!
The fact that you want to bring children into the debate tells me how far you are willing to go to protect your capital and assets......I CAN TELL YOU IT IS A PLEASURE TO SELL SOMETHING OFF TO PAY FOR TREATMENTS THAT A LOVED ONE MIGHT NEED!! And I can tell you that if you want or have to go down the unorthodox pathway to get treatment then as a responsible person you should make sure that you are in a position to be able to afford too!!
You are completely out of touch if you think our socialist model is delivering quality health care across the spectrum in NZ but then the Ministry of Health is very large propaganda machine!! Maybe your sheltered life has stopped you from seeing the people who need hip, knee ankle replacement type surgeries, or those who are on urgent waiting lists for cancer treatments......and other surgeries etc.....and some wait for months!!!!
If you really cared about healthcare and the people you would encourage people to make sure they had private cover so that they are not on some waiting list with time working against them.
Lets look at it from a GDP perspective, publicly provisioned healthcare consumes about 6~8% of GDP while private healthcare is double that. Also taking the US as an example before the US enacted the ACA it was growing at 7% even in a recession. So while the publicly funded system isnt perfect its impact on NZ's economy and costs to us teh tax payer seems to be the practical minimum.
Then there is the fact that life expectancy is better....
"Saturday night lotto draw" no it isnt from my extended family's experience
As an anecdote..
In my home country, Spain, the party in government pushed a law not to cover FOR FREE (because we have free universal healthcare) undocumented immigrants (we are not as lucky as NZ where immigration is actually easily controlled and many illegal immigrants from Africa carry nasty or previously eradicated diseases like tuberculosis easily prevented in rich countries).
What happened? Some immigrants brought or got some diseases easily cured. But as they didn't have enough money or resources to get treatment they ended up with worse health and even spreading the disease.
As we have a public healthcare, at the end that meant a big increase in healthcare spending! so the government/legislative reverted the law.
Healthcare is a juicy business. Especially when private healthcare deals with the profitable treatments (visits to doctor and simple diseases) while the public healthcare deals with the expensive ones.
I agree with your view on publicly funded system.
I don't think making migrants or migrants parents get a private insurance will have any effect in public spending. In fact it could be worse if the private insurances coverage is not good, costs too much money or it's a pain to get refunded expenses.. It might even discourage people from seeking treatment as soon as they need it.
When ensuring that migrants have a good health BEFORE being granted visa became not enough?!
Insurance lobbyist in action?
What happened? Some immigrants brought or got some diseases easily cured. But as they didn't have enough money or resources to get treatment they ended up with worse health and even spreading the disease
BINGO! It will be cheaper for us to treat all people that live here regardless of where they come from. We should ALSO put greater emphasis on preventing people with diseases from arriving here in the first place.
Insurance lobbyist in action? Yes, I get that feeling to. Something stinks of hidden agendas.
...hear the news about overloaded hospitals today? Perhaps another symptom of the negative side of immigration? Love to see the figures on recent arrivals getting in the queue. Anecdotally the stories I hear of elderly immigrant patients who cant speak english (and the hosp will employ an interpretor at $80 hour all day for one patient sometimes) with major health issues.......crazy
How dare you speak up here when you are not even born here!!!
You pay income tax, huh? You just took jobs from locals.
You consume? You are pushing up prices for locals.
You rent? You are pushing up rent.
Just bought a house?! Don't show me your passport, just look at your damn user name.
You dare breathe in our country? That's greenhouse gas!!!
depends if they are adding or substituting.
Important farming skill - when one provides feed for livestock the farmer has to make sure the expensive feed _adds_ to the animals consumption, increasing the nutrients available. If the animals were fully fed before, giving them expensive nice feed "just ruins their dinner" and they just eat less of the more cost efficient feed, usually grass.
the OIO etc were charged with this duty - that only those who could increase NZ total skill base or add processes which we couldn't get access to, were accepted for settlement. But that keeps the taxpayer population down.
consuming adds to sales volume - actually reduces costs. _Provided_ the business is locally owned.
renting just adds to economic activity . _Provided_ the houses are locally owned AND the government/council allows enough houses to be built. So having immigrants build there own fixes this wee problem.
And we can take the lower income folk based on the original rules.
In the US that's the only way to get your green card/citizenship, to show that you have skills _in_your_industry_ well above the norm. So that way they get the teachers and leaders, not just the ones used to hoarding.
As per usual the devil is in the details. If they were to make health insurance premiums tax deductible and give employers some incentive to offer health insurance and still maintain the current public health system it wouldn't be a bad thing. There are a lot of people that already have health insurance and if they all cancelled their policies, the public system wouldn't keep up. Requiring immigrants to have heath insurance isn't terrible either. The irony is that if you choose to consume a service from the private system you actually get taxed for the privilege (GST). If you waited and had it publically then it is funded and free to the user. Healthcare is one of those areas where there will never be enough money. Prompt treatment instead of waiting can actually save money.
As soon as a employer incentive system is in place, or government part part is used. It will be removed by the next government as "tax fairness" or "government cost control".
Just see Kiwisaver - we said the tax free employer part would be changed, and the protected government bonus would be removed as soon as KS was committed/entrenched into NZ society. bingo.
Immigrants dont _have_ to have insurance. its still a choice.
Likewise public system does not owe immigrants or the elderly or existing conditions treatment.
What is required is a restructure of the medical system, one that reflects that many cheaper and pre-screening techniques are available and effective, for those that can't afford the gravy train - because we cant keep giving medical people top dollar for everything when the rest of the country cant afford it. Like you say, treat early, not expensively.
Yes I have family that work in medical systems
Barbara Stewart's bill is based on a false premise and all its goals must be rejected. It is nonsense to say that "Realistically, no government can fund all healthcare from tax revenue alone." On the contrary, state healthcare provides universal insurance for the largest possible pool of people (everybody) and is potentially more cost-effective and efficient than any private insurance. It is also the fairest health insurance, because premiums are levied through taxation by ability to pay and disbursed according to need. New Zealand's descent into the mire of private health insurance is the consequence of the wealthy who can afford private insurance being unwilling to share the burden of keeping the poor healthy. Society is the loser.
Private health insurance is predicated on discrimination: premiums are most costly for the unwell who most need the insurance and cheapest for the well who least need it. Likewise, the elderly must pay far more for the same level of insurance as the young. I am 67 and still employed. I am on Southern Cross Regular Care through my company, which pays $49.46 a month for me. The moment I retire that bill will rise to $214.46 a month, the same cover for the same person. And that includes a 10% low-claims bonus.
Babara Stewart's advocacy of a $500-a-year SuperGold premium subsidy for over-65s merely indulges private insurance companies' age discrimination and robs the state of revenue that could be applied to something useful, like free school lunches. If she had any wit her bill would simply make it illegal for private insurance companies to discriminate by age.
Her wish to remove fringe benefit tax would similarly deprive the state of revenue, when health insurance is just one of many things employers and workers negotiate into a contract. We can all think of perks we'd prefer not to pay fringe benefit tax on.
And Barbara Stewart's proposal to levy a special insurance on immigrant elderly parents is such an obvious outrage against the bill of rights that I leave others to deride her.
"New Zealand's descent into the mire of private health insurance is the consequence of the wealthy who can afford private insurance being unwilling to share the burden of keeping the poor healthy. Society is the loser."
I struggle to see how a wealthy person getting private insurance stops them sharing in the burden of keeping the poor healthy. Considering the public health sector is funded through tax and getting private health insurance does not allow you to stop paying the taxes that fund the public health sector, if anything it allows the current pool of tax used for the public health sector to be spread across less people.
I struggle to see how a wealthy person getting private insurance stops them sharing in the burden of keeping the poor healthy
The more people get private insurance, the less the government will want to fund the public system. Hence the poor will eventually lose.
See sferris, it's not that difficult once you engage a brain cell or two.
And by your own logic, if more people get private insurance, and the government funds the public system less, based on the assumption that the people who have private insurance will use that over the public (a fair assumption), then at worst the poor people will have the same amount of funding per person as they do now.
Unless you are trying to say that funding will be cut at a greater rate than private insurance uptake, which I would say is very unlikely. Even the assumption above that the rate of cut will be equal to private insurance uptake is fairly aggressive.
Sadly the cost-efficiency of government provided systems in more true in the theory than in the delivery.
NZ's decent into the tough of socialised medicine is the proof of this, where frequently the wealthy pay for the services but it is the non-contributers that get the advantage of the socialisation. With the wealthy having to seek out _additional_ expensive insurance on top of their tax burden to get a shot at the services that they're paying for.
I can't be bothered replying to the rest of your socialist bullshit. IFF it ended up as free lunches (why are the poor unable to buy their own lunch??) sure...... but it DOESN"T (get that through your stupid socialist skull). It goes into "flag choice" funding, into renovating the latest WINZ office, into MBIE foyers.
What about making all health insurance premiums tax deductible? This would not fully compensate those who pay for their own health care via insurance compared with those who don't, but at least it goes some way toward this, will encourage more to take personal responsibility and reduce the tax payer burden. It is a rather unfair when the government pays the health care of some but is happy to let other provide their own out of tax paid income.
Govt subsidies or tax breaks automatically put up the price of the health insurance, by increasing demand.
I remember when life insurance was tax deductible, and tax rates were 66%; when the tax break was removed insurance premiums fell heavily, due to lack of demand.
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