Health insurance claims topped three-quarters of a billion dollars for the first time last year, according to industry figures released today by the Health Funds Association (HFANZ).

Executive director Roger Styles said the $764 million in claims paid in the year to the end of December 2009 highlighted the significant contribution the private sector was making in funding healthcare in New Zealand.

He said there had been some concern in the industry over the higher than usual claims cost growth in recent years. The December 2009 quarter's annualised 9.8 percent claims growth was down from the peak of 13.2 percent reached in December 2008.

"Health insurers obviously want to contain health inflation wherever possible, as increased treatment costs ultimately mean higher premiums," Mr Styles said.

But he said a significant amount of that additional cost represented access to services which were not previously available, or to which the public sector had limited people's access.

He cited the recent opening of a private Auckland radiotherapy clinic, which offered private patients an alternative to waiting for cancer treatment in the public sector, as being a good example of health insurance delivering extra benefits.

"Of course this adds a little to the cost, but it represents value that policyholders are getting from their insurance," Mr Styles said.

"Another example is the trend for insurers to increasingly cover things which the public sector excludes or limits funding for. ACC has recently moved to limit physiotherapy funding and has increased the number of people it excludes from funded elective surgery."

Mr Styles said he expected the rate of health cost growth to slow further this year, and supported Government initiatives to rein in cost growth in the health sector, including a focus on wage setting.

Lives covered remained static in the December quarter at 1.392 million, which was down 4300 on the previous December.

Premium income for the December year was up 5.7 percent on the previous year to $875 million.