Medical insurance in Thailand is an annual contract between the insured, and the insurer. As a result, every year you will be sent a health insurance renewal notice from the insurance company or your intermediary which invites you to renew your contract with them and at what premium.
How is the health insurance renewal calculated we may ask?
The first basis is your age. Insurers use age bands to determine pricing. As you get older, premiums increase. Age bands vary from insurer to insurer, and can be yearly, 3 yearly, 5 yearly. These premiums are published and are commonly referred to as a ‘rate card’.
Whilst this is a fairly simple concept, it get’s a little more complicated when insurers adjust these premiums. Normally insurers will explain this is down to medical inflation, which is caused by increased pricing at the hospitals, which is subsequently passed on to the insurance companies when claims come in. How these increases are then passed down to policyholders is where insurers can differ fundamentally. It’s important that you understand these differences before starting a policy as the differences are often not clear from the outset.
We summarize the differences here:
Community rating – With community rating increases are applied across all policy holders. This typically means that increases are steady and not too marked. With community rating, if you have a year where you make a lot of claims you will not be penalized at renewal. At the same time, your premium will increase slightly year on year even if you make no claims.
Claims rating – With claims rating, premium increases are shared out among those who have made the most claims in the policy year. Therefore this method of renewal is not great for those who claim regularly, but for those who don’t, it means your annual premiums are likely to be more stable.
In summary annual premium increases are unavoidable as we get older and as the price of healthcare costs increase. Make sure you understand if your policy is community rated or claims rated, and what the cost implications can be!
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