“Yo, I don’t think we should talk about this
Come on, why not?
People might misunderstand what we’re tryin’ to say, you know?
No, but that’s a part of life”
To borrow some lyrics from Salt-N-Pepa’s 1990s hit: “But that’s a part of life”
Pre-existing conditions are an unfortunate part of life. They are also an extremely important aspect of your health insurance in Vietnam & throughout SE Asia. Without the right advice, they could be burn a hole in your wallet for years to come.
In this article you’ll learn how pre-existing conditions affect your health insurance. So let’s get started:
How to avoid worrying about pre-existing conditions
1. As we’ve outlined in our previous article, The Best Time to Get Insured is when you’re completely healthy. You do not have pre-existing conditions to consider. Aim to get insured when you’re healthy.
2. Stay insured. Preferably with the same insurer who is a safe long-term insurer. If you have gaps in insurance or are always changing providers, you expose yourself to the risk of having your policy affected by a pre-existing condition. Anytime you’re starting a policy from new, there’s a risk you could be denied claims for pre-existing condition*. If you limit the number of times you’re starting a policy from scratch, then you limit your risk.
*See the article The Best Time to Get Insured for more info on this.
How providers handle pre-existing conditions when applying
If you want a pre-existing covered from inception of the policy, then you’ll need to declare that condition on the application. This will go to the underwriting department, who may request supporting medical documents. They will then decide to:
1. Accept the condition with no special terms – this is done if it’s not a very serious condition, without likelihood of high future claims.
2. Accept the condition with a premium loading – they agree to accept the risk of a condition & chance future claims if you agree to pay more on your annual premium. For example, we’ll cover condition XYZ for a 20% loading on your premium.
3. Exclude the condition – if it’s too risky, an exclusion will apply
If the insurer requests supporting medical documents and you’re not able to provide them, then an exclusion will usually apply. Please note all providers handle pre-existing conditions differently. Some providers basically do not accept anything & some are better at considering them. This will depend on how they do their underwriting & the terms of their policy.
Speak a Tenzing agent if you’d like to find out more about this.
If you have an exclusion, what gets excluded?
If you have an exclusion as part of your policy, then the exclusion will apply to your condition AND related treatments to that condition.
This can be an issue if you have a serious condition that causes many related conditions, treatments and claims.
How providers handle pre-existing conditions at renewal
This is without a doubt one of the most overlooked aspects of a policy. Far too frequently a buyer only looks at the upfront price and doesn’t think about the renewal, especially after high or serious claims.
If you are with a provider that does experience rating (#3), then you could expect a substantial increase in your premium at renewal. For people living in Vietnam, this is how most Vietnamese providers operate. These can be 30%-500% or even more, depending on your loss ratio.
In addition, you could have other terms:
- Install a maximum benefit payable for your condition
- Deductibles installed
If you are with a provider that does community rating (#3), then you’ll have a fixed annual increase regardless of how much you claim, usually 5-10% per year. They cannot do the things that experience rated providers can do. Significantly safer over the long term & recommended for long-term expats.
Transferring policies with pre-existing conditions
If you have pre-existing conditions that you want to be covered continuously, there is a Continuing Personal Medical Exclusions (CPME) application. With CPME applications, a new provider will agree to accept your policy under the same terms as your previous insurer. You usually have to have:
- No break in coverage
- Similar level of benefit
- Provide certificate of insurance
- Have copy of full medical questionnaire from previous insurer
Not all providers will offer CPME applications. Ask your broker/agent if you’d like to know more.
If you’re with a company that has enough employees, your plan may qualify to be a Medical Health Disregarded (MHD) plan. Very simply put, if your company has enough employees in the group, the insurer will agree to accept all pre-existing conditions.
The MHD number varies by provider, some offer it as low as 10 employees, most are in the 20-50 range.
For International providers, many will offer this at 10 or 20 employees.
Insurance buying tip:
Ask your potential/current employer to see the insurance plan before you agree to take it. Many expats living in SE Asia are given plans that do not have suitable levels of benefits or terms. This lures you into a false sense of security and can really come back to bite you. Instead, ask to be given a stipend, then choose your own plan.
Types of conditions that scare off insurers
Please remember, the point of insurance is to cover you for future unknowns. If a provider knows they’ll have guaranteed losses throughout the future, then there will be a correlating decision that matches the risk of the condition, either an exclusion or premium loading.
Not all pre-existing conditions are created equal. How providers treat pre-existing conditions is on a case-by-case basis & depends on the severity of the condition & risk to the insurer for future claims.
The only way to get an official offer is to fill out an application & have it be underwritten.
“It keeps coming up anyhow
Don’t decoy, avoid, or make void the topic
Cuz that ain’t gonna stop it
To bring it back around to Salt-N-Pepa’s lyrics in the context of insurance, don’t avoid or make void the topic of pre-existing conditions. You don’t want to wait until it’s too late.
If you’re reading this, we hope you’ve learned something that can help you avoid falling victim of naivety. When it comes to pre-existing conditions and private health insurance, naivety ain’t gonna stop it.