New Zealanders face a difficult financial decision as they grow older: continue paying increasingly expensive private health insurance premiums, reduce their coverage, or abandon private cover altogether and rely on the public health system.
The question of whether private medical insurance remains worth its cost with each passing decade is one that Consumer NZ research lead Rebecca Styles says has no simple answer. Premiums generally rise with age, she said, because older policyholders carry more health risk factors that are reflected in the cost of cover.
Southern Cross Health Insurance, the country’s largest private health insurer, confirmed the same pattern holds across the industry. The insurer’s figures from the 2025 financial year showed that members aged over 65 claimed on average more than three times the amount claimed by members aged 35 to 49.
Chief sales and marketing officer Regan Savage said the desire for certainty around healthcare access drives older members to maintain their private cover despite rising costs. He told Stuff.co.nz that members tend to adjust the type and level of cover across each decade of their lives to reflect shifting health needs, income, and priorities.
According to Southern Cross data, members in their 50s typically maintain their cover while still employed, with some benefiting from employer-subsidised group health insurance schemes. By their 60s, members begin claiming more frequently, often to avoid lengthy public hospital waiting lists. Savage said this is also the decade when members start reviewing how to keep premiums manageable while retaining meaningful cover, particularly for those who have left the workforce and lost access to employer-subsidised plans.
He encouraged people in their 60s to speak with their health insurer or financial adviser before making any changes.
By their 70s, decisions become more complex. Savage said many members at this stage choose to increase their excess, move to a different plan, or focus solely on hospital and surgical cover. Most do not drop their cover entirely, he said, but instead reshape it to remain affordable against major or unpredictable health costs.
The picture shifts again in the 80s. Southern Cross reported a drop in membership in this age group, as the public health system becomes better suited to managing the acute cardiovascular and respiratory conditions more common at this stage of life.
Styles said retirees are frequently confronted with the choice to reduce their level of cover or relinquish it completely. She noted that some people choose to “self-insure” by setting money aside in savings to cover potential health costs – a viable option, she said, for those with sufficient funds available.
The broader dynamic, however, presents a difficult reality. As people age and their healthcare needs grow, their financial capacity to meet rising premiums tends to shrink – leaving many older New Zealanders navigating an increasingly costly and uncertain private healthcare landscape.
New Zealand’s medical inflation rose from 7.4% in 2024 to approximately 14.5% in 2025, placing it among the highest increases in the Asia-Pacific region. Aon’s analysis estimates that medical plan costs in New Zealand will rise a further 18% in 2026, compared to a global medical trend forecast of 9.8%.
Those increases have translated into sharp premium hikes across all major insurers. Nib announced a 22% premium increase, while Southern Cross followed with increases of about 21%. Partners Life announced a 20% rise in health insurance premiums, followed by Accuro with 40%.
