Is your insurance fair?

New Zealanders who live with diabetes often pay exorbitant insurance premiums, no matter how well their condition is managed. Until recently, one of these people was Rae Ah Chee, and his story points to a possible solution.

Rae Ah Chee – caterer and former chair of Diabetes Auckland – was shocked when he went to take out business life cover 25 years ago. “Because I had been diagnosed with type 2 diabetes, the insurer had a set ‘loading’ which they would not budge on.”

“Loading” is an extra cost built into an insurance policy. It’s intended to cover losses to the insurance company that could come from insuring someone who they consider carries an especially high risk. In Rae’s case, the initial loading was 400% over and above the normal premium.

Rae has been insulin dependent for nearly 20 years, but has always managed his condition and his general health carefully, and his HbA1c levels remain within his target range.

When he was first told how much he would have to pay for insurance, he asked what he needed to do to get the loading reduced: “I asked for medical yardsticks against which I could be tested to support my control of key indicators – weight, blood sugar control, HbA1c, blood pressure, etcetera. But they wouldn’t budge on the loading, nor answer anything to indicate what I had to do to get the loading looked at.”

However, Rae was persistent. Every year he contacted his insurance company, presented his test results to them, and asked again to get his loading looked at. “By showing consistent HbA1c readings, good blood pressure, good cholesterol readings, static weight, along with overall good health and no diabetic-related medical issues I was able to get the loading slowly reduced over a period of eight years. Eventually, I was rated ‘normal’, with no loading!” He says his diabetes specialist has told him his management is “exemplary”.

WHAT ABOUT OTHERS?

Rae had several factors in his favour. As well as his own dogged determination, he had an insurance broker who was behind him all the way, and he’d by now found an insurance company that was willing to listen.

He knows that many other people with diabetes are still struggling with excessive loading on their life and health insurance policies, and he has a keen sense of how unfair it can be. “When I chaired Diabetes Auckland, we had an annual lunch for people with diabetes who’ve been on insulin for 50 years. The attendees at these functions were obviously senior, but all looked to be in good health, indicating to me that diligent care of your health can very likely lead to normal life expectancy.”

Rae wanted to take further action to help other people. “About five years ago I started to canvass whether insurers would consider giving people with diabetes standard rates as long as they met certain criteria. HbA1c readings are a gold standard and a proven yardstick. So with those, along with weight, blood pressure, and cholesterol readings, a person should be able to be rated ‘normal’ or subject to a small loading which can become normal if they show consistent ongoing readings within the tight range that is agreed.”

He found that many insurers were not interested. “Insurers are very, very slow to change. They are ultra conservative.” However, “with 240,000 diabetics in New Zealand, this is a huge number who may well be unfairly paying too much for insurance protection, or even be considered ‘uninsurable’. To put people in a position of being uninsurable is grossly unfair, especially for those who diligently look after their health.

“I would like insurers to treat people with diabetes fairly, with agreed criteria, so that premiums can be normal or loaded according to how the person measures alongside the criteria. And if annual checks are necessary, the premiums can be assessed accordingly – static, upwards or downwards.”

Rae believes that hard questions around diabetes and insurance need to be asked – and answered.

Diabetes NZ is interested in taking up this cause. While work around this is in the very early stages, the organisation is currently looking at supporting a proposed new system that would take advantage of recent advances in data management to develop a world-leading suite of insurance products for people with diabetes.

Insurance companies have traditionally operated in a way that means they don’t have the time or resources to manage each and every client’s case in the complex and ongoing way that people with diabetes really require. A company will do one assessment, and then that’s it. But new technology has begun to be used overseas that allows insurers to manage much higher caseloads with more complexity and ongoing responsiveness.

Diabetes NZ says: watch this space.

**This article first appeared in the Winter 2019 issue of Diabetes Wellness magazine. Subscribe to Diabetes NZ today to receive your copy.