Many New Zealanders are confused about how ACC and private health insurance interact. Here's a clear explanation of both systems.
What is ACC?
ACC (Accident Compensation Corporation) is a unique New Zealand government scheme that covers treatment costs and lost earnings for accidental injuries. Every employed New Zealander pays an ACC levy.
ACC covers: - Treatment costs for accidental injuries - Lost earnings during recovery (up to 80% of salary) - Rehabilitation costs - Home help and support
ACC does NOT cover: - Illnesses and diseases (heart disease, cancer, diabetes etc.) - Gradual deterioration conditions - Mental health conditions unless caused by an accident - Overseas injuries in some cases
What Does Private Health Insurance Cover That ACC Doesn't?
Private health insurance is designed to complement ACC, covering the large gap of health conditions not caused by accidents:
- All medical and surgical conditions not related to accidents
- Cancer treatment (a massive gap in ACC)
- Heart disease, diabetes, and other chronic conditions
- Planned surgery for age-related conditions
- Specialist consultations for illness
Do I Need Both?
Yes — in most cases. ACC handles accidental injuries well, but illnesses and diseases are where private health insurance becomes essential. Given that most health conditions requiring surgery in New Zealand are illness-related (not accidental), private health insurance fills a critical gap.
Key Takeaway
Think of ACC and private health insurance as complementary layers of protection: ACC for accidents, private insurance for illness. Together they give comprehensive health coverage for New Zealanders.