Issues with group medical insurance policies -

Over the past few years, it’s become clear that many people in the Expat centers of Chiang Mai, Hua Hin, and Pattaya are opting to join non corporate group insurance policies as a way of saving money on premiums, by benefiting from group discounts.

I have decided to write this blog article as I feel it’s important that people understand the potential implications of these non corporate group insurance plans, when compared to setting up individual health insurance policies.

Before starting, its important to note that my business has corporate group customers, and we do not discredit group insurance in corporate situations. However, our view of ‘groups’ constructed of Expats is slightly less positive for reasons I shall explain in the following article;

Issues:

Stability – How long will the group you are joining exist for? If it ends in 5 years then you will need to re-apply on an individual basis, meaning any pre-existing conditions are not covered. This could potentially be a huge issue if you got a disease such as cancer.
Choice of insurer. Locally compliant insurers in Thailand will not allow groups made up of people not belonging to a corporate entity. To set up a corporate group locally, you have to prove the company is real by providing copies of company documents. Providers who will allow non corporate group formation are typically offshore providers. Issues here were explored in a previous blog post on offshore providers.
Underwriting. Group insurance is assessed annually by insurers where they look at how the group has performed. If the group has seen several high cost claims in the year, the renewal will be priced to cover these costs. Individual insurance increases are based on a much larger pool of people, meaning annual increases are small. While a 20% discount on year 1 may seem appealing, it’s little use if your premium increases by 30% the following year.
Age profile- As described above, a group carries more risks in terms of premium increases should claims occur. As a result, the age profile of a group becomes important. If a group is made up of predominantly older people, then the risk of high cost claims then increases. As an individual client of an insurer, you are part of a larger more diverse group, meaning risks are spread.