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A quick question

Written By: - Date published: 8:14 pm, October 12th, 2009 - 26 comments
Categories: ACC - Tags:

Do any health insurance companies fully fund long-term claims in the way ACC is being asked to?

26 comments on “A quick question ”

  1. rocky 1

    Sort of. If you take out an insurance policy you won’t be covered for any pre-existing conditions. If you have to make a claim you are covered for anything to do with that claim in future – but only if you keep paying the premiums.

    Unfortunately once you have made a claim (or if you get sick with something before you get insurance), if it’s an ongoing condition, you are stuck with that provider forever, because you won’t be able to switch providers and have that now pre-existing condition covered.

    Likewise if you cancel your policy and you have a pre-existing condition covered by the provider, you can’t even sign up again with the same provider at a later date and have that condition still covered.

    Exclusions for pre-existing conditions also aren’t just for things that are ongoing. If you have for example one particular type of heart problem, when you take out a policy you will likely be excluded for any heart related problems, regardless of whether they have anything to do with your pre-existing condition.

    • rocky 1.1

      On a related note, there are also issues when you have health insurance as to whether ACC pays or your provider pays. Generally speaking, if ACC will cover something, your insurance provider won’t. But the problem lies where ACC will only cover part of the cost for something. Some health insurance providers (for example Southern Cross) won’t cover anything if ACC will cover even part, but if ACC won’t cover it at all they will. Other insurance providers (for example Tower) will cover whatever shortfall there is from ACC.

  2. Marty G 2

    I think they do, in that they have to have a pool of funds to cover future costs of current claims should they go under etc. In fact, I think they buy insurance themselves against their future costs.

    Earlier this year when Nick Smith was using that dumb ‘If ACC were a private insurer it would be insolvent’ line, what he meant, as I understand it, is private insurers have to have their future liabilities covered.

    The difference, of course, is that insurance companies can and do go under. The State is perpetual. So while being fully-funded is nice, it’s not vital for ACC. Nick Smith didn’t seem to mind when for the previous 18 years he has been in Parliament.

    I’ll see if I can check it out though.

    • Draco T Bastard 2.1

      Another difference is that insurance companies will go the extra mile not to pay out on insurance claims.

  3. John A 3

    Is National Superannuation fully funded?

    • Marty G 3.1

      good point , John, it’s not apart from a little bit by the Cullen Fund and we know why, because it’s a state scheme, like ACC.

      In fact, National reduced future funding of super and said it was nothing to worry about when it cut the Cullen Fund payments.

      • Herodotus 3.1.1

        Was not the Cullen fund only going to provide about 15% of future super requirements at best?
        Unless we strike oil (Not in the Nat parks) will the current population be able to be supported in their retirement (Whatever the applicable age will turn out to be, my guess will be you retire when you can afford to or 75)
        Re ACC also not only are NZ poorly paid, but the country is not as wealthy as we would all like. The “luxureries” we have enjoyed since the 50’s will slowly be reduced/wiped out if we follow the ongoing current policies.
        Someone needs to show real leadership & be bold with a plan to progress this country. With the little mindness that is being currently displayed (By both sides) we will in my opinion slowly become a very ugly society. So were is our FRD New Deal or a 1930’s govt?

        • Marty G 3.1.1.1

          we’re far wealthier than we were in the 1970s when the 3rd Labour government established ACC.

          In fact, ACC saves us a huge amount – look at the States where there’s no ‘no fault’ cover for injuries and people have to try to sue someone to cover their costs instead. It’s a disaster that ties up the court system and it’s unfair because many people can’t even afford to take a suit.

          • Herodotus 3.1.1.1.1

            Not all good ideas come out of the US. Like all good policies they get “Bastardised” and there is a loss on focus what the original intentions were. Would not a re-evulation of ACC to see what should be covered where the source of funding is to power this. Otherwise there could be a hugh mill-stone around our neck that we cannot fund. An idea is immigrants/toruists to have private medical insurance with immigrants qualifying after a no. of years to be ACC covered.
            Private insurance will work for the blessed who remain healthy and the rich.

  4. vto 4

    If only we could all fully fund our future ay?

    Says a great deal about the power that rests in the hands of the state that it can carry out this sort of crappola.

    A glaring example of the power imbalance in our society. Give the power back to the people!

  5. Cactus Kate 5

    A quicker question –

    Do any health insurance companies cover those who have not even paid premiums to it?

    • sk 5.1

      An even quicker question: what does a lawyer charge out in HK when on a NZ blog at 4.41pm?

      • Marty G 5.1.1

        As much as she can? It’s the capitalist way.

        And there’s so many lazy public servants to complain about.

    • Marty G 5.2

      Yeah, good point Cactus. Another way in which ACC is not a comparable to a private insurer.

      It was actually set up to take away the need for the unfair and expensive system for personal injury tort law suits that previously existed. To think of it as just like a private insurer is a bit silly.

    • The benefit of paying taxes is that you can expect to get the benefit of doing so.

      Cactus Kate, are you suggesting that those who do not pay taxes or ACC levies ought not to receive the benefit of superannuation or ACC?

      I must admit that this has some attraction.

      Even beneficiaries pay taxes.

  6. Michael Over Here 6

    This was mentioned above but it deserves to be beat in to the ground so no one forgets:

    ACC is the price that we pay in order to live in a no-fault society. ACC is public compensation for sacrificing our right to seek damages via lawsuits through the court system. When we start examining the cost of ACC we should also consider the steep costs on our court systems (and our national character) if we had a system like America where damages are sued for.

  7. Cactus Kate 7

    Sk – She charges nothing when she’s on holiday unfortunately and is coming in from a long day in a lounge chair by the beach being served by below NZ minimum wage workers.

    ACC is so silly that it will pay out for those who don’t contribute to it (myself) when I come to NZ and have an accident (Calm down I have full health insurance). But then takes away my right to sue someone who causes harm to me. Surely this will appeal to your audience – why should you be paying for Cactus Kate’s ACC appointments in NZ (if she didn’t have full health insurance) when she visits when she does not pay the levy anymore?

    Mickysavage – Beneficiaries pay GST and a neglible amount of other taxes and levies, but are not net taxpayers. They take more from the system in benefits, housing etc.. than they put in.

    • Armchair Critic 7.1

      “why should you be paying for Cactus Kate’s ACC appointments in NZ (if she didn’t have full health insurance) when she visits when she does not pay the levy anymore?”
      For similar reasons that we pay for the Fire Service to put out fires on uninsured and underinsured properties, who don’t pay or underpay a fire service levy.
      No funding model is perfect, but ones that minimise ambulance chasers are preferable to those that encourage them.

    • sk 7.2

      Cactus Kate, touche. I will take your word for it. Bali?

      A couple of questions though.

      (i) Our PM clearly values tourism given he made a complete ass of himself on Letterman (when he did not even qualify as a guest). What happens to tourism in NZ if we went to a tort system?

      (ii) Since the Hon N. Smith is now into actuarially assessed liabilities, what is the actuarially assessed liability of the government’s climate change policy (implicit subsidy)? Should I care if the cement that Cactus Kate’s lounge chair rests on while on holiday in NZ comes from NZ or Indonesia?

  8. ExportEarner 8

    Cactus Kate- you said Beneficiaries don’t pay taxes- you are assuming that under a National government a certain amount of people are to be kept on the benefit in order to keep the minimum wage low and people afraid of losing their jobs.

    Under a Labour government that supports workers and working, the benefit is seen as a short term fall back in tough times. In the long run (as well as all being dead thanks Mr Marshall) they certainly pay their full share.

    Are you suggesting that PriceWaterhouse Coopers or whoever the accountants are don’t know a silly scheme when they see one and can’t calculate what one is like?

  9. Rich 9

    It doesn’t matter that private health insurers need to run a fund. They are private insurers, cover a small group of people and have no guarantee of the future level of premium income. It may be that as public health cover improves, less people will be willing to pay for private insurance, for instance.

    It only makes sense for ACC to fund future entitlements if the government wants to scrap ACC and go back to a litigation-based system with private insurance for the minority who can afford it. Which is their real approach, isn’t it?

  10. Yes, life insurance companies (with products like income protection, disability (total permanent or temporary), and medical crisis cover all fully fund, it is standard practice. It is good for long term stability as you have the funds already put aside and (especially under the new life insurance tax rules) makes accounting easier.

    The one thing they don’t do (as far as I am aware) is re-insure, how ever I understand with the size of their “customer base” that isn’t really required (and under extreme cases the general taxation could possibly cover things). It is how ever costly to switch over, as MartyG noted, at the moment they are basically required to carry on paying existing claims as they go, plus the whole of new claims, once the switch over is complete the cost will be no different.

    So yes, it’s good normal business practice. Personally I believe ACC should be operating as basically a commercial entity, with out the blood sucking money grubbing arsehole-ness, and I think it does that well.

    This beat up over the shift in funding models is flat out lying on the part of Smith and Judge, I am seriously concerned by it.

  11. Adrian 11

    Of course they are “fully funded”, they know that if they go tits up, the government will have to pick up the mess.

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