The co-payment option, likely to take effect in January, will benefit the insurance industry in the long run as the model seeks to reduce unnecessary claims, lower premium costs and improve affordability for health insurance in an aged society, as Thailand is now dubbed, says Maybank Securities.
Chuchart Pramolpol, secretary-general of the Office of the Insurance Commission (OIC), recently revealed the future option for insurance companies to switch policies to a co-payment model to reduce unnecessary claims, particularly for simple illnesses.
Under the new health standard, insurance companies have the option to include co-payment features in their policies. The change would take effect upon policy renewal.
A co-payment is a fixed amount or a percentage of the bill paid by the insured for covered services.
Insurance companies offer a co-pay to lower premiums and policyholders usually need to pay it at the time of service.
"This change aims to make health insurance more accessible for those who truly need it by lowering premiums," said Nontapat Sahakitpinyo, an analyst at Maybank Securities (Thailand).
As the health insurance industry posted substantial growth over time, the OIC observed the number of claims and the loss ratio are also increasing. This poses "a challenge for insurance companies" to develop policies that better serve Thailand's ageing society in the future, said the regulator.
The elderly and those with a history of serious illness also face difficulties accessing health insurance given the high premiums.
"To manage rising costs, one proposed solution is to introduce co-payment mechanisms aimed at reducing claims for minor illnesses and unnecessary hospitalisations," said Mr Nontapat.
The implementation of co-payment is anticipated to lower premium costs, enhancing the affordability of health insurance, particularly for the elderly, he said.
In the short term, outpatient visits at hospitals may decline during the transition to co-payments as unnecessary visits shrink. Patients may reconsider seeking care for simple illnesses if they have to share the cost, said Mr Nontapat.
"However, in the long run we believe this will benefit the industry as lower premiums gradually increase insurance penetration rates," he said.
