I got my non-O from UK last month. They do say that insurance is not required but in the application, there is still a requirement to upload insurance details. Doesn't make much sense, I know, but I just uploaded my UK travel insurance details anyway. Nothing about inpatient/outpatient nonsense. It worked for me.
I made the same mistake once. The IO, said 'don't do it again' and stamped me out normally, with no fine. If she is going to try that, make absolutely sure she gets to the airport in good time, if stopped by police on the street and checked, the consequences can be severe. Safest bet is to stomp up the ฿1900 for an extension, or get a tourist visa before she leaves home.
Not so, at least in UK. I just buy a non-O (single or multi-entry). Enter for 90 days. If multi-entry, repeat for up to one year. No insurance or deposit of funds required. Just need to show pension statements and be over 50. Easy, really.
It's also possible to get a multi-entry Non-O, which would mean he could just leave the once, without having to worry about 60+30 extensions on the METV but that may not be cost-effective in terms of fees.
I spend 6 months in Thailand (in two blocks of 90 days) and 6 months in UK, each year. I've tried a variety of visas over the years but the easiest is now the non imm-O based on being over 50 with pension. Only significant requirement is to show pension statements, no proof of insurance is now required.