New Health Standard is issued by the Office of Insurance Commission as Order to the Registrar No. 14/2564 under the subject ‘Agreement criteria and additional contract statement about an ordinary Health Insurance Standard for the insurance companies, and Order to the Registrar No. 15/2564 under the subject “Agreement criteria and policy statement of Personal Health Insurance Standard for non-life insurance companies, will be effective from November 8, 2020 onwards.

The reason for change leading to a stipulation of the New Health Standard is because the previous one had been used for quite some time ago and it may not align with today’s advanced medical technology, and the old standard may not fully cover innovative treatments. Besides, the insurance companies have launched health insurance with complex coverage so it’s hard to compare coverage benefits among their companies. Moreover, some terms and conditions are too broad and may cause disadvantages to the Assured. Consequently, the Office of Insurance Commission solved some concerning issues for all parties pertaining to health insurance, and that gave rise to the New Health Standard. The objective is to modernize additional health insurance policies under the same standard, to make a comparison, and to be fair to all parties.

 

Interesting Issues of New Health Standard

1. Summary of Essential Issues and Benefit Table

The Office of Insurance Commission has defined New Health Standard into 13 sections with the main objective to set up standard practice so that users will have a proper understanding and can make a simple comparison.  This standard is divided into Inpatient and Outpatient.

Inpatient benefits

Section 1: Room & Food fee

Section 2: Medical Service fee for the diagnosis

Section 3: National Medical License (Physician) fee for examination

Section 4: Operation treatment (Surgery) and Medical Procedure fee

Section 5: Major operation that doesn’t involve an overnight stay in hospital (Day Surgery)

 

Outpatient benefits

Section 6: Medical service fee for direct diagnosis before and after being treated as Inpatient

Section 7: Injury treatment fee as Outpatient within 24 hours (caused from an accident)

Section 8: Rehabilitation Medicine fee after being treated as Inpatient

Section 9: Medical service fee for treatment of chronic kidney disease

Section 10: Medical service fee for radiation cancer treatment

Section 11: Medical service fee for chemotherapy cancer treatment

Section 12: Service fee for emergency ambulance

Section 13: Medical treatment fee for minor surgery

 

2. Definition

The Office of Insurance Commission has updated the definition and also added new definitions; for example, “Fraudulent Misrepresentation” to clearly state that any action is considered as “the Assured cheats” and the insurance company has the right to terminate the contract or the word “Surgery” which is previously stated as surgery in broad meaning, but the New Standard clearly defines it in more detail which case is major surgery, which case is a minor one, and which case is Day Surgery.

3. General Requirements

Annual Insurance Renewal: The policy of old health insurance states that “The company reserves the right to renew additional contract” but for New Standard, the company will renew health insurance contract in case of insurance anniversary term except 3 following cases in which the insurance company can reserve the right to refuse a renewal of health insurance contract.

i. In case there’s evidence that the Assured doesn’t make a true statement as revealed in Proposal Form of Insurance, Renewal Form, Health Condition Declaration Form, that will be essential cause for the company to charge higher insurance premium, and to refuse to make a contract or conditional insurance.

ii. The Assured requests for benefit from injury treatment or sickness that causes no medication.

    
iii. The Assured requests for compensation benefit of admitting to the hospital from all companies together, and the value exceeds actual income. That means if we don’t breach 1/3 of condition, the insurance company will have to renew insurance policy at all times (if we still want to have this coverage)
 

Insurance Premium Adjustments: The old health insurance policy states that “Reserve the right to adjust premium, if necessary, with the consent of the Registrar” but the New Standard affirms 2 conditions for premium adjustments as follows.

i. Age and Occupational Class of each individual.

ii. Expense for higher medical treatment or experience in paying the whole compensation of this additional portfolio contract. The company will inform the Assured in written form by registered mail in advance, or other method accepted by the Assured no less than 30 days. However, the adjusted premium must be in the rate already approved by the Registrar.

* Follow details of Order to the Registrar No. 14/2564 at  http://oiceservice.oic.or.th/document/Law/file/12496/12496_07dc6f82714b99e0b8451f27e3658fb4.pdf

 

What about Those Who hold Old Health Insurance contracts?

Previously, the Office of Insurance Commission made Order to the Registrar No. 55/2562 and 56/2562 asking the company to compare old contract with New Standard, and sent a Letter of Consent to the old Assured for having the right to renew the old contract, or to renew New Standard without health check-up; however, the problems found during preparation period are as follows:

• Old contract varies and is held by many Assured so it’s difficult to compare differences between old contract and New Standard at all angles in a limited time frame.
  
  
• The insurance company has the risk of being sued if violating the Order.
  
  
• The right to receive a tax deduction for a health insurance contract applied before 2009, is different from the present time.
   

The Office of Insurance Commission made the Order to the Registrar No. 14/2564 and 15/2564 to allow those who hold old contract to maintain that old one, and the insurance company must send a summary of key issues about New Health Standard to customers and arrange communication channels for them in case of any query. That means if the holders of the old contract want to apply New Standard, they have to buy a new contract additionally.

Options for the Holders of Old Health Insurance

• If we think about an old contract that offers coverage with an appropriate premium, it’s fine to continue holding that contract because the premium of New Health Standard costs more (as coverage is more comprehensive), and will be much higher as we get older.
  
  
• If we realize that old contract coverage is not sufficient, we can buy New Health Standard as extra insurance. Also, don’t forget to consider our ability to pay the premium at a reasonable rate.
  
  
• If we need New Health Standard but don’t have enough budget, and we’re making the decision whether we should end the old contract, please review the following concerns:

o   Is our old health insurance applied before 2009? If it is, we’ll have the right to claim a tax deduction for the entire amount. At present, we can take health insurance fees to deduct tax for no more than 25,000 BHT per year. If we end the insurance policy applied before 2009, we’ll immediately lose the right to that tax deduction.

o   The waiting time will start with counting from one again. If we want to have continual coverage, we should apply New Health Standard at first, and let it passes the longest waiting period for 120 days at least to ensure that we get 100% coverage, and then terminate the old contract. Therefore, the waiting period should be carefully calculated.

o   The most important concern is, if we’ve already had the congenital disease, we shouldn’t terminate the old contract because health insurance (either old one or New Standard) won’t cover pre-existing disease, except the Assured informs the insurance company, and the company acknowledges and accepts the risk without any exception in that coverage.

Overall, what we should follow up next is New Health Standard issued by each insurance company to study its coverage and premium. The New Health Standard has already been launched on November 8, 2020, and all criteria is under New Health Standard. Those who are holding old insurance need to think about holding the old one further or buying a new contract and review the policy of each company upon making a decision.

 

Nipaphan Poonsathiensap CFP®, ACC
Freelance Financial Planner, Writer, and Lecturer