Following a passionate session on New Zealand’s soaring medical costs at the recent National Adviser Conference, conference organiser and representative body Financial Advice New Zealand (FANZ) said it welcomes medical insurance case studies from members depicting unfair costs or practices.
“Medical inflation in New Zealand is significantly outpacing comparable markets and that is driving premiums up across the board,” said FANZ CEO Nick Hakes. “Just as the general insurance sector is facing scrutiny on affordability, the health insurance sector needs the same level of attention.”
Finance minister Nicola Willis announced a six-month review into home insurance affordability in February to be led by the Council of Financial Regulators insurance sub-committee, which includes FANZ as one of its permanent members.
“We see clear parallels between rising general insurance premiums and what is happening in the health insurance sector, and we are ensuring those parallels are part of the conversation,” said Hakes.
In the conference session, co-presented by nib national manager advisers, Amanda Saville, and veteran financial adviser Kevin Smee, data presented showed over the past three financial year’s nib’s costs paid out for radiology increased by 83% and specialist consultations and treatments 160%.
Reflecting this surge, Aon’s 2026 Global Medical Trend Rates Report predicts medical plan costs in New Zealand will rise by 18% this year, up from 17% last year, compared with a predicted regional average of 11.3% in Asia Pacific (11.1% in 2025) and 9.8% globally (10%).
Though New Zealand is suffering from similar factors driving up health costs across other OECD countries, including an ageing population, a growing burden of chronic diseases and the adoption of more advance medical technologies, its costs have increased significantly more than its peers.
For example, a hip replacement in New Zealand now costs far more than in Australia, the UK or Canada, said Smee, noting this is simply not sustainable. “In my view, the key driver is the lack of alignment between the public and private healthcare systems in New Zealand… (with) limited effective checks and balances between them. This can lead to inefficiencies, cost shifting and ultimately higher costs within the private sector.”
nib CEO Skye Daniels acknowledges premiums have risen to an unaffordable level for many New Zealanders and the system needs structural change. “We are actively working to manage costs, through better collaboration across the sector, and providing value.”
Hakes said the bigger issue is why the underlying cost of healthcare is rising faster here than in comparable markets.
“Based on the feedback we are receiving from advisers and the impact on their clients, Financial Advice New Zealand sees a clear opportunity to work constructively with insurers on this issue.”
Conversations have started, he said, but are still at too early a stage to advocate for any single mechanism to address the issue. “We're focused on understanding what is already working and where the gaps are.”
Smee said FANZ needs to raise awareness as the issue is now critical, and not just among advisers but among consumers as well.
“A long-term solution will require collaboration across the entire ecosystem. Ideally, I’d like to see cross-party political alignment on healthcare as a long-term priority; a formal working group involving government, insurers, providers and industry representatives; and a clear roadmap outlining where we want the system to be in two, five, 10 and 15 years.
“In a nutshell, consistency is going to be the key here. If we continue to have frequent structural changes driven by political cycles this will continue to cause disruption and higher costs across the board. So having a more stable, long-term approach is crucial.”
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