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

Friday, 15 July 2022

New research from Finder shows 1 in 3 New Zealanders have borrowed money to cover the cost of medical care.

One in three people need financial assistance in order to receive healthcare in New Zealand, results from a survey show.

The research by independent comparison platform Finder showed more than 1.3 million New Zealanders had borrowed money to cover the cost of a medial bill.

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

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

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The Commission for Financial Capability cross-referenced the common types of loan with the financial knowledge of borrowers.

The survey of 1507 people found 9% had taken out a personal loan to cover medical expenses.

Gen Z and millennials (both 45%) were the most likely to have borrowed money for a medical expense, compared to 31% of Gen X and 20% of baby boomers.

Bryan Betty, medical director for 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.

Broadly speaking Gen Z is made up of 10 to 25-year-olds, while millennials are around 26 to 41 years old.

Gen Xers are aged roughly 42 to 57 and baby boomers are 58 to 67 years old.

The Royal New Zealand College of General Practitioners medical director Bryan Betty said patients could access disability support from Work and Income NZ for things like dental work, counselling, and medical aids if they are not covered by the public system.

“This would be a considerable number of patients,” he said.

“The other area we see is where patients individually raising money by borrowing or lending from family members for medical procedures are often for operations that are not covered by public hospitals.”

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

He had seen this particularly with patients needing bariatric (weight loss) surgery as that was refused by the public system, he said.

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

This was the case for Taranaki woman Justine Shera, who withdrew her KiwiSaver for the $25,000 surgery after losing and gaining the same 40 kilograms three different times in her adult life and wanting to be around for her 11-year-old son Aiden.

Personal finance expert at Finder, Kylie Purcell, said medical debt was a worrying trend.

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

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

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

“It’s a good idea to take out 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 rising.

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

That equates to 39% of the adult population.

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