Alarm over health insurance costs for Parent Boost Visa

Migrant families say insurance policies for the incoming Parent Boost Visa are too expensive.

The new visa category, designed to allow parents of migrants to visit New Zealand for up to 10 years, opens for applications on Monday.

It allows parents of citizens and residents to stay in New Zealand for up to five years, with an opportunity for the visa to be extended for another five years.

However, the visa includes strict requirements for health insurance for visiting parents, which needs to cover emergency healthcare (minimum $250,000 a year), medical repatriation, return of remains and cancer treatment (minimum $100,000).

The policy also needed to cover at least a year and be maintained for the entire duration of their stay in New Zealand.

Citizens and residents wishing to bring parents to New Zealand expressed concern about the cost and availability of insurance when the visa was announced in June.

Insurance provider nib, through its OrbitProtect brand, launched a policy targeting such parents on Thursday.

For people aged 50-59 years old, nib's annual premiums cost $3900 per person.

Annual premiums cost $6000 per person for those aged 60-69 years old, $9600 for those aged 70-79 and $14,000 for those aged 80 plus.

The policy, which has been designed to cover unexpected and emergency medical expenses, does not cover pre-existing conditions, general practitioner services, medications, laboratory tests, joint and spinal surgery or continuous care such as rest home care or long-term hospital-level care.

Cover for some pre-existing medical conditions requires users to pay an additional premium in addition to a processing fee of $45.

The policy can be purchased for a maximum of 18 months at one time, although applicants must first obtain approval in principle to apply.

Insurance consultant Amy Tao said new illnesses that occurred during the policy period would also affect people's ability to purchase Orbit insurance in future.

"It's much more expensive than travel insurance," Tao said.

"I think most families would struggle to afford it. But seems that if you want to apply for this visa, you'd have to purchase such an insurance."

Wellington resident Prem Khanal described the insurance policy as "rip-off".

His father has just turned 75, living alone in a small town in Nepal after Khanal's mother and brother passed away.

Khanal has been applying for residency for his father for the past three years, but his expression of interest has yet to be selected.

The new visa category offered Khanal a glimmer of hope, as he has been waiting for an opportunity to bring his father to New Zealand on a longer basis.

"Not a single day goes by that I am not worried about his well-being, and that is literally affecting my mental health as well," Khanal said.

"I cannot afford it," he said. "Nine thousand six hundred dollars is for the first year and we need to get it for five years, so [it's] almost $50,000 just for insurance."

That figure also provided basic cover to meet the government's requirements, and the family might need to spend more money to get additional insurance to get more comprehensive cover for his father, he said.

"It just feels like the Parent Boost Visa has been introduced for rich people," Khanal said.

Christchurch woman Xiuyun Liu appreciated that policies were available to meet the government's requirement but felt "hopeless".

Liu's mother is 70 years old and her father 73, meaning it would cost the family nearly $20,000 a year on insurance for the elderly parents.

"Plus the $3000 visa application fee and cost for any immigration advisor we might use, it would be over $60,000 for three years," Liu said, alluding to the requirement that parents need to leave New Zealand to complete a health check after staying for three years.

"That's a big amount of money."

Liu said she has also been applying for residency for her parents, but their expression of interest has yet to be selected.

To sponsor her parents' application for the Parent Boost Visa, as well as her parents' residency, she would need to work hard to make sure the income thresholds were met, Liu said.

"We dare not quit our jobs, take a break or take the career risks that others can," Liu said. "But look at others who are able to enjoy a holiday often.

"We just have to work harder and harder - three, five, 10 years - until my parents' expression of interest [for residency] is selected, or they pass away.

"There is no light at the end of the tunnel. Most of the time I just work without thinking. Sometimes I feel hopeless. It's really sad."

Jess Strange, chief customer officer at Southern Cross Travel, said the company was talking to the Ministry of Business, Innovation and Employment about ways to support family members coming to New Zealand under the Parent Boost Visa.

"We are working through what we may be able to offer customers," Strange said.

"It's important to get this right to ensure we can support customers and their whānau appropriately."

AIA New Zealand said it had no plans at present to offer a corresponding insurance product for this visa.

RNZ approached several insurance providers in China but was told no products currently met all the requirements.

An Indian provider said it was working on a suitable product for a more affordable price.

Immigration Minister Erica Stanford said health insurance was an important part of the visa's design, comparing it to Canada and Australia's parent visas as well as other visas in New Zealand.

"This ensures applicants and sponsors aren't left with large debts if they need to access local healthcare, as they're not eligible for publicly funded healthcare," Stanford said.

To give applicants options to find a quote or insurance product that works best for them, the visa allowed them to consider both domestic and international insurance options - provided they were from reputable insurers with strong credit ratings, Stanford said.

"This gives applicants options to test the market for the quote or insurance product that works best for them, as prices are market driven," she said.