One in three New Zealanders borrow money to pay medical bills, survey finds

A new study by Finder shows that one in three New Zealanders have borrowed money to cover the cost of medical care.

Kathryn George / Stuff

A new study by Finder shows that one in three New Zealanders have borrowed money to cover the cost of medical care.

One in three people need financial assistance to receive health care in New Zealand, according to survey results.

Research by independent comparison platform Finder showed that more than 1.3 million New Zealanders had borrowed money to cover the cost of a medical bill.

This figure had increased over the past two years – up from 30%, or 1.1 million people, in February 2020.

Of those who needed to borrow money, 16% chose to use a credit card, while 15% borrowed from friends or family.

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The survey of 1,507 people revealed that 9% had taken out a Personal loan to cover medical expenses.

Gen Z and Millennials (45%) were the most likely to have borrowed money for medical expenses, compared to 31% of Gen X and 20% of Baby Boomers.

Generally speaking, Generation Z is comprised of 10 to 25 years old while Generation Y is around 26 to 41 years old.

Gen Xers are around 42 to 57 years old and Baby Boomers are between 58 and 67 years old.

The Financial Capability Commission cross-referenced common loan types with borrowers’ financial knowledge.

Royal New Zealand College of General Practitioners medical director Bryan Betty said patients could access Work and Income NZ Disability Support for things like dental care, counseling and medical aids if not covered by the public system.

“That would be a huge number of patients,” he said.

“The other area we see is where patients who raise funds individually by borrowing or lending to family members for medical procedures are often earmarked for operations that are not covered by public hospitals.”

Bryan Betty, medical director of the Royal New Zealand College of GPs, says patients have borrowed money from family or tried to cash in their Kiwisaver early to fund procedures.

KEVIN STENT / Stuff

Bryan Betty, medical director of the Royal New Zealand College of GPs, says patients have borrowed money from family or tried to cash in their Kiwisaver early to fund procedures.

He had seen this especially with patients requiring bariatric (weight loss) surgery because it was denied by the public system, he said.

“Other times, patients borrowed money from family or tried to cash in their KiwiSaver early to fund the procedure.”

Such was the case of Taranaki woman Justine Shera, who withdrew her KiwiSaver for the $25,000 operation after losing and gaining the same 40 kilograms three times in her adult life and wanting to be there for her son from 11 years old Aiden.

Kylie Purcell, personal finance expert at Finder, said medical debt is a worrying trend.

“Households are being pushed into debt by medical bills they cannot afford to pay,” Purcell said.

“Unlike a mortgage or car loan, medical debt is often incurred involuntarily.”

Justine Shera used her Kiwisaver to afford bariatric (weight loss) surgery.

VANESSA LAURIE / Stuff

Justine Shera used her Kiwisaver to afford bariatric (weight loss) surgery.

Purcell said unpaid medical debt could tarnish a patient’s credit report.

“It’s a good idea to get health insurance to protect against any surprise medical bills.”

The Financial Services Council NZ says the number of New Zealanders with health insurance is slowly increasing.

Statistics show that 1.45 million New Zealanders were covered by private health insurance in December 2021, up from 1.42 million in March 2021.

This equates to 39% of the adult population.

The rate is still significantly lower than in Australia where 55% of the population has health insurance.

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