Sheppard was yesterday relaxed about the review time frame and warned against any immediate premium drops.
"I didn't expect to hear from them before the New Year and I would anticipate they wouldn't meet in January because they take two months off. In February, I would envisage the board would resolve to proceed because remember a members' resolution is non-binding," he said.
Then the hard work would start. The full investigation would probably not begin until around March and run through to at least June, with a target to report to the full board around October and the matter then go to the annual meeting at the end of the year, Sheppard predicted.
"It will take a year. Premium changes might come in 2013. It won't come earlier because they will consult widely and they've had two previous cracks at it and they will want to put it to bed once and for all," he said.
Sheppard is not expecting huge price drops.
"I think there will be an outcome and an adjustment. I don't think it's going to be anywhere near [as] dramatic as what people think," he said.
He wants to be on the investigation team and expects chairman Graeme Hawkins and chief executive Peter Tynan to join it.
Southern Cross is New Zealand's largest medical insurer with 830,000 members and processing 580,000 claims annually but Sheppard won support for his demands that the board investigate and report on how to recognise longevity and loyalty. Member couples aged 65-plus pay a top annual Southern Cross premium rate around $12,000 to $13,000, he said.
"That's a quarter to a half of their national super," he said.
Even couples on Southern Cross' cheaper specialist and surgical policies paid around $6000 annually, he said.
Southern Cross' spokesperson said the top policy, UltraCare 400, cost $11,058 for a 65-plus couple while the most popular hospital and specialist plan, Wellbeing Two, cost $7580 for a 65-plus aged couple annually.
These are policies with no excess and premium payments made by direct debit and include a healthy lifestyle reward.
Sheppard urged 65-plus Southern Cross members to ditch the business.
"They should be self-insuring," he said, warning healthy older couples, who did not expect to claim, to bank their annual premiums and use that if needed, rather than remaining Southern Cross members.
He remains annoyed that the society initially rejected his premium concerns.
"They don't believe it's ... widespread," he said of concerns about the escalating premium prices, encouraging members to write to the society to outline premium concerns and remedy suggestions.
"Then they will know people have taken the effort to express their concerns because it's the only way to get the message across," Sheppard said.
His motions to the meeting said Southern Cross currently sets premiums on the basis that each age band covers its own claim costs.
"Thus as young people have less claims, they have lower premiums and conversely as we get older our premiums rise sharply.
"Unfortunately these premium increases occur when we are least able to afford cover, as [our] incomes likely will also be falling," his resolution said.
HEALTH COSTS
* 1.39m New Zealanders have health insurance.
* 90,000+ Southern Cross members aged 65+.
* Hip replacements: $18,000-$22,000.
* Cardiac bypass: $37,000-$45,000.
* Angioplasty with 2 stents: $17,000-$20,000.
Sources: Southern Cross/Health Funds Association of NZ
