Government involvement in the New Zealand private health insurance industry is minimal. The sole source of regulation of the private insurance industry is the Human Rights Act of 1993; dictates that no individual can be refused issue of an insurance policy (Blumberg, 2006). However, this gives insurers much flexibility in being able to set premiums according to age and health status.
This represents an equity issue as access to private health insurance then becomes the purview of only those who can afford the premiums; a situation which does not sit well with the principle of “timely and equitable access for all New Zealanders…regardless of ability to pay” as outlined in the New Zealand Health Strategy (King, 2000).
Additionally, the provision under some insurance contracts to cover reimbursement of out-of-pocket expenditures associated with utilising publicly subsidised services (eg. GPs), has been shown to lead to a greater uptake of these services by the privately insured, and thus a greater cost to the public system (Blumberg, 2006). This questions the efficiency of the current arrangement. Minimal state involvement however, results in simplicity of administration.
Blumberg, L. J. (2006). The Effect of Private Health Insurance Coverage on Health Services Utilisation in New Zealand. Retrieved from http://www.fulbright.org.nz/wp-content/uploads/2011/12/axford2006_blumberg.pdf
King, A. (2000). The New Zealand Health Strategy. Retrieved from http://www.health.govt.nz/publication/new-zealand-health-strategy