Healthcare Insurance 'pre-existing Conditions'

[jazzbo]

This from the USA National Association of Health (Insurance) Underwriters (NAHU) --

Adverse Selection: A tendency which occurs when a person makes a decision based on his/her diminished health condition or frequency of needed treatment and is, therefore considered a poorer claims risk than most others in the group.

Pre-existing Condition: A condition or diagnosis which existed (or for which treatment was received) before coverage began under a current plan or insurance contract, and for which benefits are not available or are limited.

Pre-existing Condition Clause: A clause in an insurance contract or plan that specifies if benefits will or will not be paid for a pre-existing condition. (Example: "the insured must be covered by the plan for a certain period of time or have gone a certain amount of time without

any treatment.") Additionally, the clause may limit the benefit payable for treatment of pre-existing conditions until a certain time period of coverage has elapsed, usually six months to a year.

Are any pre-existing medical conditions covered? Even though in almost every state an individual insurance company can choose not to offer coverage to people with serious medical conditions, most Americans don't have perfect medical histories and most still qualify for individual coverage. However, there are some individuals who do not decide to purchase health insurance coverage until they know that they have a medical problem that will require the use of benefits. This is known as “adverse selection,” and it can be a serious problem for individual market insurance companies since their ability to spread risk is so limited.

To help prevent adverse selection, insurance companies are allowed to look back at your medical history for pre-existing conditions and may choose not to cover certain conditions for a specified period of time. This is known as an exclusionary, or pre-existing condition, waiting period. The amount of time an insurance company can look back at your medical history, and the length of time an exclusionary period can last, vary on a state-by-state basis.

In some states, you can receive credit against a pre-existing condition waiting period if you have had prior health insurance coverage within a specified number of days. The amount of the credit against the waiting period is generally proportional to the length of the prior coverage.

Also, many states allow health insurance companies to issue elimination riders to people who have pre-existing medical conditions. Elimination riders allow for insurance companies to offer an individual with preexisting condition coverage but exclude coverage of that condition.

Example: An individual has severe seasonal allergies but can control them with medication. A company may offer the applicant two policy options: a policy at a more expensive rate with full allergy coverage and a pre-existing condition waiting period, or a cheaper policy with no waiting period that excludes allergy coverage. The individual may find that it is more affordable to buy the cheaper policy and pay for his allergy medication out-of-pocket.

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OK that is from USA... So how does this relate to Thailand? Based on a review of policy descriptions and discussions with Thailand Insurance companies and Brokers, Thailand Healthcare Insurers have regularly given waivers for pre-existing conditions for individual policies if FULLY DISCLOSED, and there has been no symptoms or treatment for 2-5 years with a minor chance of recurrence. This obviously will not be possible with chronic conditions.

A problem with Thai insurers is that, regardless of the questions asked on the Policy Application, if a blanket use of the word 'pre-existing condition' is used in the insurance product description or in the actual policy document, it is subject to definition.

The BUPA Thailand website says (and the same wording is used in the formal Table of Benefits) with no specific definition:

What am I NOT covered for? Although you will be covered for the major costs of treatment, there are certain things that

BUPA Thailand has to exclude. Full details of these can be found in your policy document. Some of the conditions which we cannot pay for are as follows: pre-existing conditions.

Here is an assortment of definitions of 'pre-exsiting conditions' -- and the big concern is the 'should of known' clause:

Medicare (USA) A pre-existing condition is any known medical condition (or related condition) that has, within a two year period immediately prior to the commencement of the policy one or more of the following characteristics;

It has been diagnosed.

It has needed medical treatment (including drugs, special diets, injections or other procedures or investigations).

Medical advice has been sort including routine medical examinations.

Medical advice should have been sort if recognized clinical advice had been followed.

It has undiagnosed symptoms, whether recognised or not.

After two years of continuous cover, pre-existing conditions will become eligible for cover (unless the condition or benefit is specifically excluded) if, at the first time of receiving treatment the insured person has not:

Suffered any symptoms.

Consulted any medical practitioner for check ups, follow up examinations, medical treatment or advice.

Been prescribed or taken medicine including over the counter drugs, special diets, injections,

physiotherapy for that medical condition or any related condition for a continous two years.

From New Zealand:

"Pre-Existing Condition": In relation to each Relevant Person, any medical or physical

conditions or circumstances:

(a) which You are aware of, or ought to have been aware of; or

( for which advice, care, treatment, medication or medical attention has been sought, given, or recommended; or

© which have been diagnosed as a medical condition, or an Illness or indicative of an Illness; or

(d) which are of such a nature to require, or which potentially may require medical attention; or,

(e) which are of such a nature as would have caused a prudent, reasonable person to seek medical attention; prior to the date(of coverage)

From an international Health Insurance Broker Broker:

A preexisting condition is defined as an illness or injury for which the person has been under the care of a physician and has received medical care or advice or a condition for which a reasonable person should have sought treatment.

Many individual carriers are now offering a waiver of the pre-existing condition clause for anything disclosed on an application and not specifically excluded. It is important to honestly disclose any preexisting conditions to your insurer. Failure to do so allows an insurance

company the right to recind your policy at a later date.

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So preventive care, regular recommended diagnostic tests, and seeking medical advice when you suspect something is not quite right, is the best approach especially when you are taking out a Policy with Large Limits per Incident and with large premiums... if you Should or Ought to have known.

[ProThaiExpat]

Better yet, allow the carrier to conduct a physical exam with a physician of their own choosing and a full disclosure by the applicant in the history taken by the doctor, particularly regarding all drugs being taken.

Make sure the carrier waves preexisting exclusions for any medical problems after two years, if no changes in your condition have occurred. Example, high blood pressure controlled with drugs, high cholesterol controlled by medication, other almost certain conditions that are almost always found in older people for which only medication is required to control the condition to a normal reading.

[jazzbo]

This is IN FACT the Paragraph dealing with Pre-existing Conditions from an actual Policy issued by a Thai-based Healthcare Insurer:

Pre-Exisitng Conditions -- The Company will not pay any benefits for pre-existing conditions during the first two years from the commencement date. A pre-exisitng condition means any disease, illness, or injury or symptoms and complications thereof for which the Covered Person was treated or knew about (or a prudent person SHOULD have been aware existed), within 5 years before the commencement date of the Policy.

After 2 years from the first Policy commencement date, the Company cannot refuse to pay any claims for pre-existing conditions unless such pre-exisitning conditions have been endorsed.

Exclusion for pre-existing conditions MAY be waived if the Covered Person has declared such conditions on the joining application form and the Company has agreed to cover them.

(My caps)

However, the catch-all for anyone trying to play fast and loose with the 2 year discovery period would have to look at the following which, in some version, is on (most likely) every insurance application in Thailand:

Important Notice: Pursuant to Section 865 of the Thai Civil and Commercial Code, the Insured must disclose all information in this proposal form, fully and faithfully, otherwise, the policy issued hereafter may be void

.

[tonydabbs]

This is IN FACT the Paragraph dealing with Pre-existing Conditions from an actual Policy issued by a Thai-based Healthcare Insurer:

Pre-Exisitng Conditions -- The Company will not pay any benefits for pre-existing conditions during the first two years from the commencement date. A pre-exisitng condition means any disease, illness, or injury or symptoms and complications thereof for which the Covered Person was treated or knew about (or a prudent person SHOULD have been aware existed), within 5 years before the commencement date of the Policy.

After 2 years from the first Policy commencement date, the Company cannot refuse to pay any claims for pre-existing conditions unless such pre-exisitning conditions have been endorsed.

Exclusion for pre-existing conditions MAY be waived if the Covered Person has declared such conditions on the joining application form and the Company has agreed to cover them.

(My caps)

However, the catch-all for anyone trying to play fast and loose with the 2 year discovery period would have to look at the following which, in some version, is on (most likely) every insurance application in Thailand:

Important Notice: Pursuant to Section 865 of the Thai Civil and Commercial Code, the Insured must disclose all information in this proposal form, fully and faithfully, otherwise, the policy issued hereafter may be void

.

Jazzbo, I'm sorry, guy, but what I am reading here is "much ado about nothing," to quote a famous dead poet.

Insurance companies are taking a gamble when they insure you. Many people who buy health insurance have medical problems that they want the health insurers to pay for. Insurance is intended to cover uncertanties, not certanties.

The purpose of the "pre-existing conditions clause" is to bring fairness into the game.

Goverment health insurers can accept pre-existing conditions because they can cover their losses by raising taxes among a large captive population.

With private insurance companies, while it is true that they can cover part of the cost of a large claim by raising the individual's premium at renewal time, they can raise it only so much. If there are a large number of high claims losses of this nature, they have to raise premiums across the board to their entire population of insureds. Who, by the way, are not captive, and are free to switch to another insurance company if they want to - which many do.

Thai Health Insurance recently raised premiums and reduced benefits because of extremely high claims loses. A few months before that, BUPA raised premiums to cover claims losses, and they have another premium increase coming for the same reason. AXA is also planning a rate increase because of high claims losses.

You would be amazed at how often I am told by someone that they are buying health insurance because they have a medical problem that they want the insurance company to pay for. Those are the honest ones. Many more try to hide the fact they need treatment. So, by law, the insurance companies have up to 2 years to find them. If they haven't been found and excluded by then, they will be covered.

It is true that a cover note exclusion or rejected claim could have been the result of misunderstanding. But, in terms of the rejected claim, you do have recourse. If that happens, don't yell at the insurance company. It won't help your case at all. Instead, carefully read the policy and then build your case. We have been succesfull in doing this, a few times

The policy is a contract that the insurance company is obligated by law to follow. It can work for you or it can work against you.

When you buy a policy, check to see what the waiting period is for certain conditions, usually 120 to 180 days. Then read the list of exclusions. The list of exclusions are pretty much similar for most insurance plans.

The point is that

most

of the problems people have with insurance companies aren't because the companies are trying to take advantage of them. Problems come from a lack real understanding of health insurance in thailand and unreal expections of what the insurance will do for them.

Edited October 28, 2007 by tonydabbs

[jazzbo]

If this is so much 'much ado about nothing' why do so many people come to you with a basic misunderstanding about their prospective policy?

You would be amazed at how often I am told by someone that they are buying health insurance because they have a medical problem that they want the insurance company to pay for. Those are the honest ones. Many more try to hide the fact they need treatment.

So that was exactly my point in raising this topic: There are ways to work with the pre-existing rules, and there are reasons that you should not try to 'get around' them... that if you and your broker work with a prospective insurer there are ways to cover many conditions with a level playing field for both parties... and the first thing that ANY insurance company will do when you submit a large cliam, after happily accepting your premium payments for years, is to find some way that you have mis-represented your disclosure when you applied for the policy.

So that is why this FORUM is useful... so that the persons reading here (about a hundred so far today) might have a better understanding how how this all works... how many people, even those who have ALREADY purchased health insurance, have actually read this section of their policy?

As you say: Problems come from a lack real understanding of health insurance in Thailand and unreal expections of what the insurance will do for them... so you can maybe edify the Members here rather than dealing with them one by one... and they can be better informed when they contact you, another broker, or the prospective insurer directly themselves.

[tonydabbs]

If this is so much 'much ado about nothing' why do so many people come to you with a basic misunderstanding about their prospective policy?

You would be amazed at how often I am told by someone that they are buying health insurance because they have a medical problem that they want the insurance company to pay for. Those are the honest ones. Many more try to hide the fact they need treatment.

So that was exactly my point in raising this topic: There are ways to work with the pre-existing rules, and there are reasons that you should not try to 'get around' them... that if you and your broker work with a prospective insurer there are ways to cover many conditions with a level playing field for both parties... and the first thing that ANY insurance company will do when you submit a large cliam, after happily accepting your premium payments for years, is to find some way that you have mis-represented your disclosure when you applied for the policy.

So that is why this FORUM is useful... so that the persons reading here (about a hundred so far today) might have a better understanding how how this all works... how many people, even those who have ALREADY purchased health insurance, have actually read this section of their policy?

As you say: Problems come from a lack real understanding of health insurance in Thailand and unreal expections of what the insurance will do for them... so you can maybe edify the Members here rather than dealing with them one by one... and they can be better informed when they contact you, another broker, or the prospective insurer directly themselves.

Good point, Jazzbo.

[Jingthing]

This is very helpful, thank you.

[ProThaiExpat]

tonydabs: You would fail a course in insurance underwriting if you ever made the statement below contained in your post: "Insurance companies are taking a gamble when they insure you."

The whole purpose of the science of underwriting is to eliminate chance and to perfect, to the best degree possible, the spreading of risk so the chance of getting an insured who is an covered expensive health expense is balanced by the insured who has few problems and who pays the same premium.

There are very few insurance companies in the world who don't make money in the long term and many of them are the richest corporations around. Band undwriters make for loses and good underwriters make for profits.

[Jay jones]

Very few young buy insurance, since they feel infallible and since they are young and in good health, they feel no need for insurance. The older and more likely poorer health, buy insurance, without much convincing needed. This is known as ADVERSE SELECTION> You will never make money when the sick rush to you for your product and the young and healthy don't....

JKJ , CLU

[jazzbo]

So I guess NOW is the time for anyone without Health Insurance, or with a policy without a guaranteed lifetime renewal (assuming your premium payments stay current) to purchase a Policy before the Healthcare Insurers read this forum topic and realize that they will never make money .

The first indication is when they start issuing non-Renewals... then they will start pulling out of a certain region (or state province where applicable), then they will pull out of the Healthcare Insurance Line altogether... And if you think this doesn't happen, just try these days to buy or even renew your homeowners policy in the 'expanded' Hurricane Zone in the USA.

BTW the NAHU definition of 'Adverse Selection' is in the first line of the OP of this topic...

And rather than the term 'Gambling' I would prefer 'Calculated Risk' assuming that the risk-taker has all the requested information fully disclosed.

[astral]

This is why you should start on the Private Insurance ladder as early in life as possible,

before the "existing" conditions become apparent.

[Jingthing]

The insurance industry for health is a bad thing here or anywhere. People who really need it can't buy it. People who don't need it don't buy it. Some advanced countries like France have figured this out and have the government take care of everyone through a national program, where yes, everybody pays.

Edited October 30, 2007 by Jingthing

[jazzbo]

When I talk to people here in Thailand who say that they do not 'believe' in paying for health insurance my reply is this:

You, or your family, may in fact only have a 2% chance of having a large or catastrophic medical incident. But 100% of those in your situation who DID have such an event once thought the same as you.

So the insurers have calculated the risks and they make these policies available... what in many cases you are buying is peace of mind for you and your family if you are lucky enough to end up NOT having to make a claim in any given year... and the 'starter' policies offered by groups here in Thailand including by our Sponsor, whatever their limitations, make far better sense than no policy at all. That's the way it is TODAY... I'll leave the figuring out to how it SHOULD be to someone else.

All you have to do is find somone who WANTS to by health insurance for his or her family, but either cannot afford it, or becasue of past medical conditions, cannot buy it at all... or worse, talk to someone who has had a major medical incident but through frivolity decided not to buy it when it WAS available. One of the reasons that I write all this is because, when asked why do I like to live in Thailand, I say one reason is that I am a 'Health Insurance Refugee' because I can buy very good health insurance coverage here in Thailand but, because of a chronic medical condition, I am denied the same in the USA.