The True Cost of Under-Insured Health Plans
When Health Insurance Falls Short.
As a Life & Health insurance adviser, it pains me to see New Zealanders, year after year, face heartbreaking situations because their health insurance fails them when they need it most. Many Kiwis assume they’re covered—whether through personal health insurance or employee benefits—only to discover that the life-saving treatments they desperately need are not included in their plan.
The reality is that several health insurance products, even popular ones like Southern Cross Wellbeing 1 or 2 under employee benefits, come with limitations. These plans often fall short when it comes to certain treatment options, including non-PHARMAC-funded cancer medications.
PHARMAC, while a vital entity in Aotearoa, does not fund every treatment, even if MedSafe has approved it. Additionally, PHARMAC’s criteria for funding can be arbitrary and restrictive, leaving many Kiwis without access to essential medicines. Keytruda—a medication frequently mentioned in news articles—is a prime example. While it is funded for some cancers, it isn’t for others, and the eligibility criteria can change unexpectedly.
How a Simple Review Saved the Day
I recently worked with a client who held a Southern Cross Wellbeing 2 plan, initially acquired through a group scheme with their previous employer. While this product is one of the better offerings from the country’s largest health insurer, it comes with a significant limitation: coverage for non-PHARMAC cancer treatments is capped at $10,000 per year. This is often insufficient, as advanced treatments like Keytruda can cost around $10,000 per month.
Three years ago, I reviewed this client’s policy and pointed out the gap in their coverage. Together, we added AIA Cancer Care—a dedicated private health insurance product focused on cancer treatments (and at approximately 25% of the price of full health insurance). This decision became life-changing.
In late 2024, my client was diagnosed with an aggressive form of breast cancer. Keytruda was a core part of her treatment plan, and we filed a claim with AIA for $136,000. Without this additional coverage, she would have been left with just $10,000 of annual support under her previous policy. Adding AIA Cancer Care meant she didn’t have to consider applying for a reverse mortgage on her home or face the impossible decision of prioritizing life-saving treatment over paying her mortgage.
Don’t Wait Until It’s Too Late
If you have health insurance—or rely on coverage from your employer—ask yourself: Do I know exactly what risks I’m covered for and where the gaps might be? If the answer is “I’m not sure,” it’s time for a review.
Whether you reach out to us or another trusted adviser, getting a professional health insurance review could make all the difference. Ensure you fully understand your policy and are adequately protected against life’s uncertainties.
Don’t let assumptions cost you or your loved ones when it matters most.
