27/07/2026
In a story published by Stuff in December of 2025 an issue faced by thousands of older New Zealanders was brought to light…
A 73-year-old widowed pensioner, living on $2,153 a month, had watched her health insurance premium jump from $522 to $715 in a single year – that’s an increase of $193 per month on an income with very little room to absorb it. After 36 years of paying premiums and rarely claiming, she was seriously considering cancelling the cover she’d held her entire adult life.
It’s a situation that resonates with many; premiums keep rising and retirement income stays fixed, at some point the maths just stops working. Cancelling your health insurance feels like the only answer.
But it’s almost NEVER the right one and in most cases, there’s an option that people simply don’t know exists – one that can make health cover genuinely affordable again without giving up the protection that matters most.
Health insurance has always cost more as you get older, that part isn’t new. Insurers charge more because older policyholders tend to need more treatment – and that’s a cost they have to reflect in premiums.
What has changed dramatically in the last two years is the rate at which the underlying cost of healthcare itself is rising. In New Zealand, medical inflation – which tracks how much more expensive hospital stays, surgeries, specialist consultations, and diagnostics are getting – jumped from 7.4% in 2024 to 14.5% in 2025.
It was not just the cost of procedures have increased but utilisation by policy holders has also surged, more and more policy holders are using their insurance as the public sector health system has come under pressure.
That cost doesn’t sit with the insurer – it gets passed on through premiums. Major insurers announced base increases of between 16% and 33.6% in 2024/25, and for older policyholders where age-based increases stack on top, some saw their premiums rise by more than 50% in a single year.
New Zealand’s Ministry of Health survey data shows a clear pattern: health insurance coverage peaks at 45.2% for people aged 45–54, then falls sharply – dropping to 27.4% for those aged 65–74, and just 16.5% for people over 75. A big part of that drop is people making exactly the kind of decision prompted by an unaffordable renewal notice.
There are two consequences of cancelling that most people don’t fully appreciate until it’s too late.
New Zealand’s public health system provides universal care – but “care” doesn’t always mean “care when you need it.” As of February 2025, more than 74,000 patients were waiting longer than four months just to see a specialist for the first time – before any treatment even begins. For common procedures like hip replacements, cataract surgery, and cardiac investigations, waits of one to two years are not unusual. Private health insurance is what allows you to bypass that queue, choose your specialist, and be treated on your timeline.
What is re-underwriting, and why does it matter? When you first took out your health insurance, the insurer assessed your health at that point in time. Any conditions that developed after you took out the policy are generally covered – because you were healthy when you started. That assessment is called underwriting, and it locks in your cover for conditions you develop later. If you cancel your policy and try to take out a new one – with the same insurer or a different one – you go through underwriting again, but this time with your current health. Every condition that has developed since your original policy began – high blood pressure, a heart condition, joint problems, diabetes, anything – will likely be treated as a pre-existing condition and excluded from the new policy. For an older New Zealander who has built up a health history over the decades, this can mean the new policy they thought would protect them actually covers almost none of the things they’re most likely to need it for.
The longer you’ve held your policy, the more valuable it is. Every year you stay insured is another year of conditions that are covered if they arise. Walking away from that history isn’t just a financial decision – it’s a health one.
This is where most conversations about unaffordable health insurance stop short. People know they can downgrade their cover, or cancel altogether. What they often don’t know is that adjusting their excess can reduce their premium significantly, sometimes dramatically, without removing any of the core benefits they’re paying for.
Here’s what makes this particularly relevant for older New Zealanders. Most people chose their excess when they first took out their policy – often in their 30s or 40s when savings were thin and they wanted to minimise any out-of-pocket costs at claim time. That made sense then, but decades later, the picture is often very different: the mortgage may be paid off, the children are financially independent, and there is a savings buffer that simply didn’t exist before.
The excess that was right for a 35-year-old may not be the right setting for a 65-year-old – and most people have never revisited it.
One thing to be aware of: increasing your excess is generally straightforward and doesn’t require a new health assessment. Reducing it later, however, often does – meaning your current health could be reassessed and conditions potentially excluded. This is why it’s a decision worth making carefully and ideally with advice.
A standard excess applies to every claim you make, regardless of what you’re being treated for. However, some health insurance products available in New Zealand offer a more sophisticated approach – and for older policyholders especially, it’s worth understanding the difference.
Certain products in the market are structured so that a higher excess applies to general or routine claims, bringing your premium down meaningfully, but that excess is waived entirely when a claim relates to a serious or critical condition. In other words, you benefit from lower premiums during the years you may rarely need to use your cover, but you’re not left facing a large upfront cost at exactly the moment a major health event occurs.
This addresses one of the most common concerns people have about raising their excess: “What if something serious happens and I can’t afford the upfront cost?” A well-structured policy can give you the premium relief you need now, without removing the safety net that matters most.
A real-world example: Partners Life Base Medical Cover
Partners Life offers one of the broader excess ranges in the New Zealand market, with options from $0 all the way up to $10,000 on their Base Medical Cover. Importantly, only one excess is payable per person, per claim year – so even if you make multiple claims in a year, you only pay your excess once. What makes their structure particularly relevant for older policyholders is how the excess is handled when it matters most:
- Excess Waiver for Serious Conditions: If you are diagnosed with a specified serious condition – including heart attack, stroke, coronary artery bypass surgery, or critical cancer – and are admitted to a private hospital or treated as a serious illness, your selected excess is waived entirely. You chose a $5,000 excess to bring your premiums down? In the event of a heart attack, you pay nothing.
- Major Diagnostics: For 19 specified major diagnostic tests – including MRI and CT scans – the excess payable is capped at the lesser of your standard excess or $250. So if you have a $2,000 excess but need an MRI, you pay $250 – not $2,000.
- Multiple Policy Benefit: If you hold another health insurance policy and a portion of your costs are recovered from that policy first, the Partners Life excess is reduced by that recovered amount – in some cases eliminating it entirely.
This kind of layered structure is exactly what “sophisticated excess design” looks like in practice. All products are subject to claims assessment and full policy wording terms and conditions – your adviser will walk you through exactly what applies to your situation.
The full range of these kinds of structures isn’t always visible on a comparison website or in a standard brochure. Understanding what’s actually available, and whether it suits your specific situation, is exactly the kind of conversation a financial adviser is equipped to have.
Adjusting an excess sounds simple on paper. In practice, there are a few things that are genuinely important to get right.
If your health insurance premium has become genuinely difficult to manage, the answer isn’t to walk away from cover you’ve spent years building – it’s to find out whether there’s a smarter way to structure it. For many New Zealanders, there is.
A registered financial adviser can help you:
Your health cover is worth protecting, talk to Mel today and find out what’s possible before you walk away from it.