But insurers say questions about the industry’s sustainability are unfounded.

The Health Funds Association’s latest statistics show there were $256 million worth of claims in the September quarter, an increase on the record high of $245 million paid in June.

HFANZ chief executive Roger Styles said New Zealand health insurance claims were on track to reach a billion dollars for the first time in the coming financial year.

There were 1.335 million people with health insurance at the end of September, a drop of 4100 over the quarter, and 1% since September the year before.

But 3000 more people in the 65 to 69 age group had health insurance.

Nib chief executive Rob Hennin said the 10,000 people dropping out of the private health insurance market in this country was very high by international standards.

But he said if insurers offered more choice and more flexibility, it would go a long way to helping improve the number of people who wanted private cover.

Geoff Annals, of Accuro, said there were challenges for the health system in general, not just insurance. “The sustainability of the costs of health are a real challenge. Insurance is a relatively small part of the picture.”

He said private health insurance could provide a pressure valve release for the public health service.

But he said the number of people who thought they could afford health insurance was shrinking.

People who most needed it, such as the elderly or young people who would struggle if an illness put them off work, could least afford it, he said.

“We’re not looking for a fix from the Government but looking for engagement from everyone.”