I do the exact same timings. The single entry O, from the London Embassy, worked for me with 90 day stints in Thailand. I tried to be smart and get a multi O-A to save on applications but the insurance requirement will put paid to that.
With hindsight, what you say makes sense. However, when I bought my O-A, there was no mention of health insurance being required. Previously, I used a Non O which involved a separate application every time I wanted to come to Thailand for 90 days. The O-A offered a means of only applying every two years, for an unlimited number of trips, which made sense at the time. What does not make sense is buying an annual health insurance for a 90 day trip, when travel insurance provides adequate medical coverage for 90 days. What the Embassy are suggesting is a way of getting by until my O-A expires and I can then apply for a Non O again.