Do kids really need Health Insurance?
At Greentree Advisers we interact with families every day and a common question we get from parents is do they really need to give their kids health insurance. Sometimes parents have health insurance through work that doesn’t cover the kids and they just have not looked into arranging it. Sometimes parents simply think the public health system will provide everything their child needs, even if they don’t believe it will do the same for them. Sometimes it’s just too much for a parent to consider the possibility of their child getting sick and needing treatment and sometimes there is a perception that it is too expensive, even though it only costs around $5 per week (the cost of a coffee) to get comprehensive health cover in place for a child.
There are three key reasons to get health insurance for any person, including children. Let’s look at those three reasons and how they apply to our little ones.
The first reason is to avoid ending up on a public wait list and experiencing delays in getting the treatment you need. Even though kids are usually well taken care of in the public health system, waits are certainly possible (just ask a parent with a child waiting to have grommets inserted or tonsils taken out in the public system). While a child waits for their treatment, their condition may affect their ability to play, learn, or even attend school and this can have a flow on effect on their development.
The second reason is to have access to non-Pharmac funded treatment. Pharmac was established in 1993 by the Government in response to the escalating cost of medicine. Its purpose is to organise a list of medicines that will be subsidized in the public health system (the Pharmaceutical Schedule) and to promote competition to achieve price reductions. The decision to fund a drug depends on Pharmac’s assessment of three assessment areas: clinical, economic and commercial. This includes the answers to questions such as: Are there alternatives? How big a population will it treat? What is the opportunity cost? Having health insurance that provides non-Pharmac cover can be beneficial when Medsafe has approved the drug as safe, but Pharmac does not provide funding for it. This can occur because Pharmac decides the drug is too costly or when there is uncertainty about the drug’s effectiveness – if the drug is new and long-term data has yet to be accumulated. Sadly, it can often be when a child has a very serious condition that their parents discover the drug they need for their child is not funded by Pharmac and are faced with the daunting task of coming up with tens and sometimes hundreds of thousands of dollars to give their child a chance at recovery. Having the right health insurance in place will ensure your child has access to all Medsafe drugs, despite Pharmac’s decision to fund them.
The third reason it is a good idea for anyone to take out Health Insurance as soon as possible is to safeguard their "future insurability". When a person takes out a health insurance plan the insurer will assess their application, and typically exclude any pre-existing conditions - so they won't cover any issue that already exists. For this reason, getting cover as early as possible is important, as it minimises the number of exclusions a health plan will have. So, getting kids a health insurance policy early on can often guarantee that they have a policy free of exclusions - which is very valuable and a great thing to have as they enter adulthood.
If getting cover for your kids is something you have been putting off, I encourage you to speak to one of our advisers today about getting it sorted.
Call us on 0800771331. It may be the best investment for their future you will ever make.
**Photo by Blake Meyer on Unsplash