That's Super sorted - what about health?
The Health Funds Association (HFANZ) today renewed its call for more to be done to diversify health funding sources to reduce the future projected burden on taxpayers.
For the past decade, Treasury has been warning of two major looming financial pressures on the Government’s finances – healthcare and super. HFANZ chief executive Roger Styles said today the changes announced to superannuation eligibility helped address one of these, but left the larger pressure – rising healthcare costs – unaddressed.
“Health will be a bigger hit to the Government books than super – and unlike super, there is no easy fix. You can’t just raise the age of eligibility for surgery,” Mr Styles said.
Treasury’s long-term forecasts show the cost of healthcare jumping to 9.7 percent of GDP by 2060 – up 56 percent on 2015 - or another $8 billion in today’s dollars.
The same projections show the cost of super growing to 7.9 percent of GDP by 2060, although this will now be closer to just 7 percent with the changes proposed by Prime Minister Bill English yesterday.
HFANZ has long said that health insurance could be playing a bigger role in meeting future healthcare costs. Currently around 28.5 percent of New Zealanders have health insurance, which last year funded $1.13 billion in healthcare, mostly for elective surgery.
“If we addressed some of the disincentives and penalties in the system, and instead moved to encourage health insurance, there is no reason why we couldn’t see health insurance funding much more in the future. That would help take some of the pressure off the Government budgets,” Mr Styles said.