Insights into Thailand’s Employee Insurance and Benefits
Employer-sponsored medical benefit costs expected to increase 8 to 9% in 2022
According to the latest Marsh Mercer Benefits (MMB) Health Trends report, the medical trend rate in Thailand is expected to increase by 8 to 9% in 2022 — below the Asia average of 10%. However, employers in the country must continue to manage costs carefully as local trends could motivate insurers to revise group medical insurance policy premiums.
In mid-February 2022, the Thai government amended the criteria for COVID-19 medical coverage. Insurers have followed and updated their policy wording as per the new regulations, which continued to cover medical costs from COVID but with added conditions imposed on hospital admission. The subsequent reduction in COVID-related hospitalisations is expected to result in fewer claims based on the new criteria.
Employee insurance claims returning to pre-pandemic levels
Despite falling COVID-related claims, the reason why MMB is continuing to advise and help employers in Thailand keep close tabs on their claims utilisation is due to the fact that the three leading causes for hospitalisation and medical treatment claims in Thailand — upper respiratory tract conditions, gastrointestinal illness, and personal accidents — is starting to trend upward towards pre-pandemic levels as life gradually returns to normal in the country.
In fact, after seeing premiums reducing by about 15 to 20% in 2020 and expecting premiums at renewal to vary between 2% to 5% in 2022, we feel that premiums in 2023 could be unchanged or see slight increases. This is due to the factors described above, coupled with long COVID symptoms and claims from medical procedures and treatments that had originally been deferred or delayed due to the pandemic.
A gradual pivot to acknowledge mental health’s importance
In Thailand, more than 3 million people live with poor mental health and face stigmatization1. This is in line with our observation where an increasing number of employers, especially regional human resource departments of multinational clients are requesting to extend their group medical insurance policy to cover mental health.
Typically, mental treatment is one of the standard exclusions for most policies in Thailand. Traditionally, group insurance policies only cover the physical medical treatment costs of employees or members of a company or organisation. Some insurers in Thailand have now agreed to extend medical insurance coverage to cover mental health on a case by case basis, subject to special criteria and defined scope of coverage based on the client’s requirements.
On top of that, MMB will work closely with insurers to add mental health coverage as an additional option to meet the mental health needs of employers and employees. In addition, we are supporting the need for preventive solutions for mental health risks by connecting our clients with counselling helplines as well as arranging for mental health talks and seminars.
Scope of coverage for digital health expanded post-pandemic
Another encouraging development is in telemedicine, where we are seeing the scope of illnesses expanding to allow for the diagnoses of general diseases such as cold, cough and fever. Previously, the scope of diagnoses was narrow and limited to chronic diseases.
A remaining hurdle that limits the uptake for telemedicine in Thailand is the cost of delivery of medication, which is often not covered under existing policies.
What’s next for employers in Thailand
It is important to bear in mind that on-site, labour dependent employers in the country, such as the manufacturing sector, have faced much greater insurance-related cost pressures from the pandemic. These employers saw average claims increase by up to three times owing to the formation of infected clusters and the fact that remote working is simply not possible in a factory/plant environment.
To help them ease the pressure, MMB Thailand has been actively communicating to insurers the protocols that these employers have in place, for instance what percentage of employees are vaccinated and with how many doses, and the testing frequency at the facilities. These are details that can be used to make the insurer feel confident that there is no high risk of claims, which would allow us to better negotiate premiums in the underwriting process.
Together with personalised claims analysis and deep dives for our clients, MMB can discover insights on how an employee’s utilisation compares to their benefit level. From there, we can work with clients to optimise costs solutions and outcomes while reviewing their plan design. This is especially crucial in this unique period in which longstanding health risks from an economy transitioning back to normalcy begin to resurface alongside COVID-related risks that remain present.