It is a well-known fact health care is a major expense, and unfortunately for many, a preoccupation in older age. Recently a client of mine went for his colonoscopy check-up. He had been going to the same doctor for the exact same treatment for the past decade. He is still in perfect health. The only thing that changed was the medical bill. The cost of the check-up went from 13,000 baht 10 years ago to 50,000 baht. Admittedly, this was a leading private hospital on Sukhumvit Soi 3, but an annual incremental rate of 16% seems expensive to me.
Moreover, the old 80:20 rule makes life a bit more complicated when it comes to looking after your health in old age. Past statistics approximate 80% of your lifetime medical expenses will come due during the last two years of your life. And for most of us, surviving until our 80s or 90s is not uncommon, which means you will have to set aside a substantial chunk of your life savings for what we call "long-term care" or LTC for short. So what can one do to prepare?
Although health insurance offers some protection, most insurers in Thailand have an age limit of up to 70. However, some companies are willing to offer lifetime renewal guarantees if you join the policy before 60. But for many companies, policy renewal beyond 75 is not guaranteed depending on the number of claims you make.
The other pet peeve I have about health insurance plans is they always advertise them as "no medical check-ups needed". But when you read the fine print carefully, most policies do not cover pre-existing medical conditions, dental treatments, memory loss, dementia and in-home nursing. No dental care coverage and LTC at home I can live with, but the pre-existing medical condition exclusion I find quite disturbing.
Most insurance companies work on an "honour system" basis. If you are on medication for cholesterol-lowering drugs, or high blood pressure and hypertension drugs, which many people are prescribed by their doctors as preventive measures, then you have to declare them to the insurance companies. By withholding this information, your insurance policies may be revoked and no claims can be made.
As a result, if you have the aforementioned pre-existing medical conditions, your policy will not cover you for any heart ailments, stroke or paralysis, since these symptoms are the most common complications from high blood pressure. But at least other critical illnesses such as cancer, hip and knee replacements are still covered after a certain grace period.
Going offshore for health insurance protection is one option, but the premiums are substantially higher than local insurers.
For example, someone in his or her 50s with relatively good health can expect to pay around US$8,000 (256,000 baht) per year. The premiums for a local insurer will be 70,000-90,000 baht per year, depending on the package.
Although health insurance will not cure all of our headaches, some protection is better than no protection.
Lastly, take care of your health. One hour of exercise a day is the best insurance you can buy. Not only is it free, but it will also keep the doctors away and save you a bundle of money in the long run.
Teera Phutrakul CFP® is a Certified financial Planner professional and the current chairman of the Thai Financial Planners Association.