Finance Today with RSFA

Does Your Health Insurance Fully Cover You for Life-Saving Medications?

October 20, 2023 Rod Schubert Financial Advice Season 2 Episode 2
Finance Today with RSFA
Does Your Health Insurance Fully Cover You for Life-Saving Medications?
Show Notes Transcript

In this episode, co-host Kathleen Schubert and financial expert Rod Schubert shed light on how certain private health insurance policies in New Zealand may fall short when it comes to non-pharmac approved drugs. Through real-life stories and expert advice, discover the importance of securing comprehensive coverage for these vital medications. Learn how you can navigate the complex world of health insurance to ensure your access to potentially life-saving treatments. Join us in this eye-opening discussion to safeguard your health and financial well-being. Don't miss out on Finance Today for more enlightening conversations on your financial future.

Rotorua man with stage-four bowel cancer in remission after taking Keytruda
Rotorua Daily Post - Monday 11 September 2023, 6:04 AM

Patient organisations declare medicines crisis in New Zealand
Media Release from MyLifeMatters - Monday 28 August 2023, 09:43 AM

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Kathleen: Welcome to Finance Today with RSFA, I'm Kathleen Schubert, your co-host today. We have Rod Schubert, Director and Financial Adviser, here to shed light on an important topic: Does your health insurance fully cover you for life-saving medications?  Welcome! 

Rod: Thank you, Kathleen. It's great to be here and to have the opportunity to discuss this crucial yet under-discussed topic of non-pharmac approved medicines.

Kathleen: Let's dive right in. Can you explain how certain private health insurance policies in New Zealand may not cover non-pharmac approved life-saving medications? 

Rod: Absolutely. Some private health insurance policies have limitations when it comes to covering non-pharmac-approved drugs. These policies may only offer a small amount of coverage for such medications, leaving policyholders vulnerable in critical situations. They also may not cover them at all. This means that if a person requires a non-pharmac approved drug, they might have to bear a significant financial burden themselves or opt to take a pharmac approved medication considered inferior to the one recommended by their specialist. No wonder these policy holders can feel like they are getting a raw deal, when they have been diligently paying for private insurance and perhaps this has never been pointed out to them (say slowly/clearly last piece here)

Kathleen: That sounds concerning. How can policies be reviewed or enhanced to include higher limits for non-pharmac approved drugs? 

Rod: One approach is to consider a wraparound strategy by purchasing another medical insurance base policy with large and suitable limits and to lower the cost barrier, taking a high excess on that policy. Another is to see if the current insurer can add-on non-pharmac approved medicine cover. These add-ons can provide higher coverage limits specifically for non-pharmac approved drugs. By working with a financial adviser (like us), policyholders can review their existing policies and explore options to enhance coverage for these lifesaving medications.  Alternatively, we can review your private health insurance policy and find a provider that may better suit your needs. It is fair to say this area is a minefield, and we know where the mines are placed and how to get around them so you aren’t left short of cover when you really need it.

Kathleen: Can you share a story or hypothetical scenario highlighting the importance of having higher coverage for non-pharmac approved drugs? 

Rod: Certainly. Let's consider a hypothetical scenario where a person has private health insurance in New Zealand. Unfortunately, they only have a small amount of coverage for non-pharmac approved medicines. Then, a medical diagnosis arises, requiring a non-pharmac approved drug that could save their life. Statistically, where the majority of claims sit, you guessed it, is the big C (cancer). Imagine turning up after receiving this life-threatening diagnosis, and your oncologist says, there is this amazing drug that has had better than average success, however, pharmac don’t fund it – the oncologist says, do you have private insurance that covers this type of cost? You may say to yourself, surely my medical insurer will… there will be many listeners out there that may be limited to just $10,000 worth of non-pharmac coverage per year, and that would be around a month’s supply of a reputed medicine that is Medsafe approved BUT not pharmac approved, whereas you need 12 months… 


For a real-life example, take the case featured online in the Rotorua Daily Post just this month, of Matthew Keogan diagnosed with stage-four bowel cancer. Doctors told Matthew to “let nature take its course” and then say goodbye to his family. Two days later, on November 1, 2021, he was writing his will at his hospital bedside with lawyers.

He had been given three to six months to live.

But then his oncologist recommended Pembrolizumab, known by the brand name Keytruda, a non-funded cancer immunotherapy medicine.

With the help of his medical insurance, Keogan, 51, has had 24 Keytruda infusions over the past two years, costing more than $113,000. Each early round of Keytruda costs $9745.10. From the 10th round, each infusion cost $1700.

Keogan’s most recent infusion was last week, and on Tuesday, doctors said his scans were mostly clear of cancer cells.

He remains in remission.

One year and 10 months later, Keogan feels he has “beaten the odds” with cancer.

Keogan said he was “lucky” he had medical insurance cover most of the Keytruda cost. Just months before his first diagnosis, he had considered cancelling his medical insurance due to rising inflation costs.

He said the worst part was knowing there were other options available besides chemotherapy, but they were non-funded. PHARMAC currently funds Keytruda for certain patients with melanoma and non-small cell lung cancer but not for bowel cancer.

Keogan said there needed to be a “big discussion” on cancer treatments beyond mainstream-funded chemotherapy.

In the article, Victoria Thompson, a support nurse coordinator from Bowel Cancer New Zealand, said that immune and targeted therapies such as Keytruda, funded in similar OECD countries, had been shown to prolong the lives of those with late-stage bowel cancer and in some cases result in remission of the disease.

Bowel cancer remains New Zealand’s second-biggest cancer killer and PHARMAC has funded no new bowel cancer drugs in more than 20 years.

Bowel Cancer New Zealand said current figures suggest about 3400 people are diagnosed each year and about 1300 people  from the cancer each year. It said this was about the equivalent of breast and prostate deaths combined.

Rod: Kathleen, that's a powerful example. This is why working with a financial adviser is crucial to ensure comprehensive health insurance coverage, including non-pharmac approved drugs.

A financial adviser can assess an individual's unique healthcare needs and help them secure a policy that provides adequate coverage for non-pharmac-approved drugs. They can navigate the complexities of insurance policies and identify options that align with the individual's financial situation and healthcare requirements. Individuals can ensure they have the necessary protection to access potentially life-saving medications by working with an adviser.  


Yes, touché…

Before we wrap up, I’d like to share some statistics on the number of non-pharmac approved drugs in New Zealand that could be lifesaving. According to an August 2023 featured article online in New Zealand Doctor from MyLifeMatters organisation - a collective of patient advocate organisations representing more than 1 million patients with cancers, rare disorders, diabetes, and other life-limiting conditions-  there are a significant number of drugs in New Zealand that are not approved by PHARMAC, potentially limiting access to life-saving treatments. New Zealanders' ability to access new and breakthrough medicines lags well behind other comparable OECD countries, with New Zealand dead last, ranking 32nd in a list of 32 OECD countries for public funding of medicines. 

The recent Medicines Landscape 2022/23 report is a stark reminder of just how big this issue is. While exact numbers may vary, it's crucial to recognise the impact this can have on individuals' health and financial well-being.  Powerful reasons indeed for looking into non-PHARMAC coverage for your insurance policy, and not just having it, but having an adequate amount of it. 

Thank you for joining us today. We have been chatting with Rod Schubert, Director and Financial Adviser of RSFA (Rod Schubert Financial Advice) available to all New Zealanders. Hopefully these insights have been of value. That's all the time we have for today's episode of Finance Today. Tune in next time for more insightful discussions.