New Zealand’s alternative health services industry is worth $3.8 billion and includes nearly 7,000 businesses, yet most health insurance policies were never designed to cover them. Here’s what you actually need to know.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The relationship between health insurance and alternative therapy in New Zealand is not straightforward. Most policies focus on hospital care, surgery, and specialist consultations. But the sector is growing, policy attention is increasing, and across the Tasman, the rules are being rewritten.
Why the gap between what people use and what insurers cover matters
The alternative health services industry has grown at 4.3% annually over the past five years, yet insurance products have barely shifted. That gap means most people pay out of pocket for therapies they assume — or hope — their policy might help with.
The industry is highly fragmented, with no single company holding more than 5% market share. That fragmentation makes it hard for insurers to build standardised coverage, and hard for consumers to know what any given policy actually includes.
Government sees the sector as a key part of managing strain on the primary healthcare network as New Zealand’s population ages. Allied health services can divert patients from GPs and help with preventative treatment. But that policy interest hasn’t yet translated into broader insurance coverage.
What counts as alternative therapy — and why the label matters for your wallet
The US National Center for Complementary and Integrative Health draws these distinctions, and they’re useful for understanding what might qualify for coverage. In New Zealand, the Alternative and Other Health Services industry covers a broad range: alternative health therapy, audiology, dietitian services, drug referral, family planning, midwifery, nursing, occupational therapy, podiatry, and psychology. Chiropractic, osteopathy, and physiological services are excluded from this classification.
How NZ health insurance actually handles alternative therapies
Standard health insurance in New Zealand is built around hospital admission, surgery, and specialist care. Policies from the major providers — Southern Cross, nib, Accuro, AIA, AA Health, and UniMed — all share this core structure.
The research on 23 active retail health insurance products across six insurer brand families shows that 20 of 23 restrict prescription drug cover to Pharmac-funded medicines. Non-Pharmac drugs are excluded unless a specific rider or upgrade is purchased. This matters because some alternative and complementary treatments involve supplements or non-standard medicines that fall outside the Pharmac schedule.
Some policies do offer limited cover for non-Pharmac drugs. Southern Cross’s KiwiCare covers up to $8,000 per claims year for chemotherapy drugs not Pharmac-approved but Medsafe-indicated. nib’s Ultimate Health Max has a Non-PHARMAC Plus Option. But these are cancer-drug provisions, not general alternative therapy cover.
If you’re considering alternative therapy and wondering whether your health insurance will help with the cost, the honest answer is: probably not, unless you have a specific policy that includes it. Most NZ health insurance policies do not list alternative therapies — things like naturopathy, acupuncture, massage therapy, or herbal medicine — as covered services. The policies are designed around medical treatment: surgery, hospital stays, specialist consultations, and prescription drugs that are on the Pharmac schedule.
Some policies may cover specific services that overlap with alternative therapy. Physiotherapy is sometimes covered, and some policies include limited cover for consultations with dietitians or psychologists. But these are allied health services, not alternative therapy in the broader sense.
What Australia is doing — and why it sets a benchmark for NZ
In 2024, a government-commissioned review in Australia chaired by former Chief Medical Officer Michael Kidd recommended that private health insurers be allowed to offer rebates for seven complementary therapies previously prohibited: Pilates, yoga, tai chi, Alexander technique, naturopathy, shiatsu, and Western herbal medicine.
The review assessed 16 natural therapies and found that nine should stay on the prohibited list due to insufficient evidence: aromatherapy, Bowen therapy, Buteyko method, Feldenkrais, homeopathy, iridology, kinesiology, reflexology, and Rolfing.
The therapies recommended for re-inclusion required what the review called “moderate certainty evidence” — meaning they probably or are likely to work for at least one condition compared to no treatment. Therapies that only “might” work were not included. The 2015 review had spoken relatively positively about the potential for the Buteyko method in reducing reliance on medication for asthmatics, but that alone did not meet the criteria for re-inclusion.
This matters for New Zealand because the same evidence questions apply here. The Australian review process is one of the most systematic attempts to evaluate complementary therapies for insurance coverage, and it sets a benchmark that NZ policymakers may eventually follow. The minister still needs to sign off on the recommendations before implementation, and even then, lifting the prohibition only allows insurers to cover the therapy — it doesn’t require them to.
Common misconceptions about alternative therapy and insurance
“Natural” means it’s covered. Insurance coverage in NZ is not based on whether a therapy is natural or synthetic. It’s based on whether the treatment is medical, surgical, or hospital-related, and whether any drugs involved are on the Pharmac schedule.
If it’s popular, it must be covered. More than half of Australians use some form of natural therapy, according to research cited in the Australian review. Popularity doesn’t drive insurance coverage — evidence and regulatory decisions do.
Alternative and complementary are the same thing. They’re not, and the distinction matters for insurance. A complementary therapy used alongside conventional treatment has a different evidence profile and regulatory path than an alternative therapy used in place of it.
ACC will cover it. ACC covers treatment for injuries, not general health care. Some alternative therapies may be covered if they’re part of an approved treatment plan for an injury, but this is case-by-case and not guaranteed. 20 of 23 health insurance products document how cover interacts with ACC, which suggests the interaction is complex enough that insurers feel the need to spell it out.
FAQ
Does Southern Cross cover naturopathy? ▾
Does nib cover acupuncture? ▾
Will my health insurance cover herbal medicine? ▾
What alternative therapies might be covered in future? ▾
Does ACC cover alternative therapy for injuries? ▾
The gap between what people want and what policies deliver
The NZ alternative health services industry is large and growing — 6,928 businesses and counting — but insurance products haven’t caught up. The Australian review provides a template for how evidence-based decisions could be made about which therapies warrant coverage. But until NZ runs its own review or adopts similar criteria, most alternative therapies will remain out-of-pocket expenses.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Investing for Beginners: Your NZ Guide to Building Wealth.
Sources and Further Reading
Is Your KiwiSaver Enough? BritWealth’s Alternative Investing Guide — A look at how KiwiSaver fits into a broader investment strategy and whether it’s enough on its own.
IBISWorld (2026). Alternative & Other Health Services in New Zealand. 🔗
Health Insurance Comparison NZ (2026). Health Insurance Coverage Study NZ. 🔗
National Center for Complementary and Integrative Health (2021). Complementary, Alternative, or Integrative Health: What’s In a Name? 🔗
The Conversation (2024). These complementary therapies may soon be eligible for private health insurance rebates. 🔗
KiwiCost (2026). Insurance Guide. 🔗
