Celebrity chef Simon Gault has criticized Southern Cross Health Insurance after the insurer declined funding for his recommended Mohs micrographic surgery for skin cancer, raising broader questions about whether consumers are better off paying health insurance premiums or self-funding their medical care.
Simon Gault Criticizes Southern Cross Over Skin Cancer Surgery Rejection
Celebrity chef Simon Gault expressed disappointment with Southern Cross Health Insurance after the insurer declined to cover a specialized skin cancer surgery recommended by his specialist, as reported by RNZ. Gault discovered a cancerous mark on his cheek and was advised by his surgeon to undergo Mohs surgery to maximize the chances of completely removing the cancer. According to Gault, Southern Cross declined the application because the procedure did not meet its funding criteria. The insurer offered instead to cover a standard surgical excision. When Gault asked to pay the difference out of pocket while the insurer covered the standard portion, Southern Cross declined that arrangement as well. Gault noted in a video message that from what he had read, it looked like he would have qualified for Mohs surgery before Southern Cross changed the rules. Regan Savage, chief sales, marketing, and customer experience officer for Southern Cross Health Insurance, stated that Mohs surgery remains covered when it is clinically appropriate and meets specific eligibility criteria. Savage added that standard surgical excision remains available as an established alternative when those criteria are not met. Tim Fairbrother, founder of Rival Wealth, pointed out that the insurer did not reject coverage entirely, but rather declined a specific surgical method that fell outside its current funding rules, comparing it to the insurer’s approach to non-Pharmac drugs.
Rising Insurance Premiums Spark Self-Funding Debates
With health insurance premiums rising significantly—jumping almost 75 percent over the past five years, according to industry figures cited by RNZ, and experiencing an annual inflation rate of 19 percent in the year to the June quarter, according to Stats NZ’s Consumers Price Index—some policyholders are questioning the long-term value of maintaining coverage. Russell Hutchinson, principal of Chatswood Consulting, noted that while a case can be made for either self-funding or purchasing insurance, self-insuring against major health events requires substantial savings. He categorized regular doctor visits as frequent, low-cost events best handled independently, whereas catastrophic, infrequent health events represent the core value of medical insurance. Jon-Paul Hale, founder of Willowgrove Consulting, calculated that the average person holding medical insurance from age 20 to 70 would spend approximately $230,000 on premiums over their lifetime. However, Hale argued that saving independently for health emergencies is unmanageable for most people, citing a client’s early-stage breast cancer claim that reached $265,000 within 12 months. Disputes over coverage have also climbed. The Insurance and Financial Services Ombudsman managed 170 health insurance-related disputes in the year ending June, representing a 91 percent increase compared to the previous year.
Weighing Policy Adjustments Versus Canceling Coverage
Industry advisers suggest policyholders examine their coverage levels before deciding to cancel policies outright due to escalating costs. Hale noted that rising costs have shifted the age at which consumers should reassess specialist and test coverage down from 65 to 55. For a couple aged 55, spending approximately $250 a month purely on specialist and test cover equals the cost of a monthly follow-up appointment. However, Hale cautioned that dropping specialist benefits requires professional financial advice because it can eliminate access to MRI and CT scans attached to those provisions. Southern Cross representatives similarly urged members to consult with their insurer or financial advisers before canceling policies, noting that dropping coverage can lead to permanent exclusions for pre-existing conditions if a policyholder attempts to reapply later in life. Savage emphasized that unexpected medical procedures frequently run into tens of thousands of dollars, noting that colonoscopies can cost up to $4,000 and hip replacements approximately $33,000.
Related reading