ALVIN'S INSIGHTS · HEALTH INSURANCE & FAMILY PROTECTION
He Had Health Insurance. Why Was His Cancer Drug Still $17,000 a Month?
A Christchurch family's experience shows why having health insurance is only part of the picture. What the policy covers—and how much it covers—can make an enormous difference.
Before cancer entered his life, Mike was much like many other New Zealand parents. He was working, raising his children and making plans for the future.
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A family suddenly facing a $17,000 monthly drug bill
In September 2025, a health concern led to a devastating diagnosis. The 46-year-old Christchurch father had advanced bowel cancer, which had spread to his lungs and brain.
After brain surgery, radiation, chemotherapy and other treatment, testing showed that his tumour was HER2-positive. His doctors recommended Enhertu, also known as trastuzumab deruxtecan or T-DXd.
The medicine offered another treatment option. It also came with a cost that few families could manage for long.
According to the NZ Herald report, each treatment cost the family more than $12,000 and was required approximately every three weeks. By the time the story was published, the family had reportedly spent close to $100,000 on treatment, using savings, help from relatives and public fundraising.
Mike had health insurance with Southern Cross. Once Medsafe approved Enhertu for the relevant use, his policy was able to provide up to $10,000 per claims year towards the medicine.
That $10,000 was not the total value of his health insurance, nor was it the limit for every part of his cancer treatment. Other eligible consultations, investigations, surgery, hospital treatment and cancer care could fall under different policy benefits.
But compared with a medicine costing approximately $17,000 a month, the annual drug benefit could cover only a small part of the expense.
Read the NZ Herald report · View the family's public fundraiser
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The lesson is not that health insurance has no value
The real lesson is that saying “I have health insurance” does not tell us enough.
Health insurance can provide valuable support for eligible specialist consultations, diagnostic tests, surgery, hospital treatment, chemotherapy, radiotherapy and medicines. It may reduce waiting times and give a family more choice over where and when treatment takes place.
But policies are not all designed in the same way. Two people may both say they have health insurance while having very different protection for expensive medicines.
The questions that matter are: What does the policy cover? How much will it pay? What conditions must be met? Can existing benefits be changed later?
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One medicine, three separate decisions
When a specialist recommends a medicine, three different decisions may affect who pays for it.
Is it clinically appropriate?
The treating specialist considers the patient's cancer, test results, previous treatment and overall health.
Is it publicly funded by Pharmac?
Funding may depend on the cancer type, biomarker, stage of disease and treatments already tried.
Does the health policy cover it?
If public funding is unavailable, the policy's medicine benefit, limit and claims conditions become important.
Medsafe approval means a medicine is approved for use in New Zealand for particular indications. It does not automatically mean Pharmac will fund it for every cancer or every patient.
For example, Pharmac currently funds Enhertu for some eligible people with HER2-positive metastatic breast cancer. Mike's use of the medicine was for HER2-positive bowel cancer, which did not fall within the routine Pharmac funding criteria applying to him at the time.
A doctor recommending a medicine, Medsafe approving it and Pharmac funding it are three different things.
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What does Non-pharmac medicine cover mean?
In this context, a Non-pharmac medicine is a medicine that is not publicly funded by Pharmac for the patient's particular condition or treatment use.
That does not necessarily mean the medicine is experimental, ineffective or unavailable. It may simply mean that it has not been funded for that cancer type, biomarker, treatment stage or group of patients.
Some of these medicines are extremely expensive. Depending on the dose and treatment schedule, certain treatments can cost more than $200,000 a year.
Health policies also approach these medicines differently. Some provide cover only for eligible Non-pharmac medicines used in cancer treatment. Others may cover eligible Non-pharmac medicines for a wider range of illnesses rather than limiting the benefit to cancer.
Up to $60,000 a year for eligible chemotherapy
This includes a lower sub-limit of up to $10,000 for eligible Non-pharmac chemotherapy medicines.
$100,000 or $300,000 a year
Eligible members can apply for Cancer Cover Plus, subject to health assessment and policy terms.
This Southern Cross example shows how the structure may work. A higher limit does not mean every privately funded cancer medicine will automatically be covered. The medicine and treatment must still meet the applicable policy definitions and claims criteria.
The point is not that a standard plan has no value. It is that families need to understand what level of protection they actually have before a serious diagnosis occurs.
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Can today's cover be reduced later?
Health insurance is often held for decades. What the policy promises for the future can therefore be just as important as what it covers today.
Some policies allow the insurer to change benefits, limits or claims criteria. Other policies contain contractual commitments about retaining the benefits already held by existing customers.
Some policies specifically promise not to unilaterally reduce or remove the cover an existing customer already has.
This does not mean premiums will never increase. It also does not mean every treatment or medicine will automatically qualify for a claim. It does mean that the long-term security of the benefits deserves attention when policies are compared.
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Five questions worth asking about your policy
What is the annual limit?
How much can the policy pay for eligible Non-pharmac medicines in each claims year?
Which illnesses are covered?
Is the benefit limited to cancer medicines, or can it apply to eligible medicines for other conditions?
What claims conditions apply?
Check the approved use, treating specialist, treatment stage and other policy requirements.
Can existing benefits be changed?
Does the policy allow benefits already held by customers to be reduced or removed?
Could the cover be increased now?
Would an upgrade require a new health assessment, and could an existing condition affect the application?
A low Non-pharmac medicine limit does not make the whole policy worthless. It may still provide substantial help with specialist care, diagnostic testing, surgery, hospital treatment and other cancer treatment.
The first step is to understand the cover you already have. You can then decide whether it remains suitable for your health, family responsibilities and budget.
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Where trauma insurance can help
Health insurance and trauma insurance serve different purposes.
Health insurance generally reimburses eligible treatment costs under the policy. Trauma insurance—also known as critical illness insurance—usually pays an agreed lump sum when the insured person meets the policy definition and severity requirements for a covered condition.
The money is paid to the customer rather than being restricted to one medical bill. It may help a family explore additional treatment options, receive treatment in another location, pay for rehabilitation or care, replace part of a reduced income, or meet mortgage payments and everyday expenses.
The two types of cover do different jobs. Trauma insurance does not replace health insurance, but it can provide another layer of financial support and greater flexibility at a difficult time.
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Protecting a family's choices
No insurance policy can remove all the uncertainty and hardship caused by a serious illness.
Suitable health and personal insurance can, however, reduce some of the financial pressure. It may allow a family to spend more time focusing on treatment, recovery and each other—and less time trying to find money at the worst possible moment.
The real question is not simply whether you have insurance. It is whether your cover can preserve meaningful choices when those choices matter most.
If you are unsure how your policy treats Non-pharmac medicines, cancer treatment or trauma claims, speak with your adviser or contact us for a review.
This article provides general information only. It is not medical advice, personalised financial advice or a recommendation for any particular insurance product.
Treatment decisions should be discussed with an appropriately qualified medical professional. Pharmac funding, insurance cover and claims outcomes depend on the criteria, policy wording, underwriting decisions and formal approvals applying at the relevant time.
Trauma insurance claims are also subject to the policy definition, required severity, waiting periods and other terms. Product benefits and eligibility criteria may change. Information checked on 28 October 2026.
Alvin Liu
Alvin has worked in financial advice since 2015, with a focus on personal and family risk protection, health insurance, KiwiSaver advice and ongoing claims support. Setting up a policy is only one part of the service; clear answers, regular reviews and practical help at claim time matter as well.
Contact Alvin