5 Ways Health Insurance Will Keep You From Going Bankrupt
Diseases, accidents and medical emergencies can strike a person at any time. Even the healthiest of us aren’t immune to tragedy. And when it does happen, it will leave a huge dent in your wallet because hospital bills aren’t cheap. Matter of fact, they’re getting more expensive! According to the latest Consumer Price Index, health inflation is at 1.8% year-on-year for November 2015. It’s slightly higher than the 1.7% in 2014.
Health insurance may be the last thing on your mind, especially during the time when you don’t need it. Not to mention you’re likely subscribed to PhilHealth. But let’s face it, while PhilHealth is extremely helpful when you’re hospitalized or if you undergo surgery, other occasions, such as when you go to the doctor for a check up, when you buy medicine or undergo common laboratory tests, these are mostly excluded in the coverage. And at most, PhilHealth only covers roughly 30% of your entire hospital bill and at present costs, that other 70% will likely still put you under.
So having additional health insurance to back you up in times of emergency, can be extremely useful especially for people under certain circumstances. Here are five ways having additional health insurance can save you thousands of pesos and quite possibly keep you from going bankrupt.
When you have no emergency funds
If you’ve been living paycheck to paycheck, chances are you don’t have funds tucked away for rainy days. If you have the misfortune of suddenly getting sick, just going for a check up and buying medicines can easily push you into debt. What more if it’s a major operation or severe illness which requires several weeks of recovery. Having no funds on standby can be a serious burden to you and your family. This can often leave you scrambling to relatives or friends to borrow money just so you can cover your medical expenses.
You don’t need drastic measures to afford coverage, especially if you’re strapped for cash. A number of health insurance products, for example, Paramount Direct’s Health Care Cash Plan comes for as little as P200 a month! Skipping two sticks of cigarettes a day, or 1 Starbucks latte for an entire month can already pay for your health insurance — and help you avoid going into deep debt.
Contractual employees, or freelancers usually don’t have the medical benefits often enjoyed by full-time employees. This means that you have to file for government services such as PhilHealth, SSS and PagIBIG on your own. And most of the time, you neglect enrolling for additional health insurance.
By the nature of freelancers’ work, the pay will be inconsistent. At times the jobs are continuous and pay is good. However there will also be slow days (which let’s hope doesn’t continue into a season of drought). Similarly, working part time or contractual, means there is little job security. Your last job only lasts for as long as your contract. The pay goes away once the contract expires.
If you happen to get sick during the periods of drought, this can easily deplete whatever savings you may have set aside (especially for such slow days). The nature of this sort of work is already risky from an income standpoint so it’s extremely important to secure yourself financially at all times. A medical insurance plan can (and likely will) save your life if you have these types of jobs.
If you’re unemployed or planning to resign
Usually, before you resign (and are not immediately transferring to another company) you’d need a three to six months worth of funds to be able to live off comfortably until your next job. Leaving your employer also means you’ll also leave behind the medical benefits you used to enjoy while working there.
While it may sound like a short gap, any medical emergency that could happen here could severely hurt you financially. It’s especially important to make sure you are covered medically while you’re between jobs. These are times when money is scarce and when you’d want to make every peso count. An unexpected trip to the hospital could potentially drain you of your buffer and can very well leave you bankrupt.
With no immediate means of earning it back, getting out of the hospital will be scarier than going in.
When starting a family
You’re a breadwinner now. So it’s important more than ever that you put a premium on your health. Because once you have dependents, anything that happens to you could severely impact their lives. So it is critical you have health insurance to cover for any emergencies and the potential loss of income.
Not only that, expect to make frequent trips to the hospital once you have a baby or growing children. Having a family means you worry not only about your own, but your health care expenses are now extended to your spouse and children.To put into perspective, if anyone in the family suddenly suffers from, let’s say, appendicitis, you’d be shouldering anywhere from P25,000 to as much as P125,000 for treatment. That’s more than six to ten times the average amount you spend on groceries per month!
If your employer’s health benefits don’t have an option for dependents, consider getting a policy to cover your entire family. With more people to worry about, hospital bills can easily get out of hand and leave you scrambling to make ends meet.
When you’re retiring
Retirement planning is difficult enough as it is. You wouldn’t want to mess up your hard work by spending all your retirement pay just to settle your hospital bills. Being older means you’ll be more susceptible to illnesses, especially chronic diseases that require maintenance medicine. And don’t forget retiring means you’ll also be giving up the medical benefits that you used to receive from your employer.
Since you’ll likely have no income in the foreseeable future, having your medical bills covered during your retirement will save your life. Literally. Retirement should be about relaxing, not about scrambling for money again!
However, be warned that if you wait until retirement you could be paying a lot more for health insurance in order to get a decent coverage, assuming they even cover you. This is why it’s recommended for you to get insured early and factor it into your retirement plan.
So when is the best time to get health insurance?
Now! It’s always better to shop for health insurance when you are young and healthy. This way you get better perks for lower premiums. However, if you’re reading this and you’re not covered yet, don’t wait. Go out and get it now because the longer you wait the more expensive it’ll get.
Besides, if you wait until you’re sick before applying for a plan, it will already be too late. Most policies do not qualify pre-existing conditions, and you would have to wait for a month or more before coverage takes effect. And if you wait until you’re suffering from chronic conditions such as diabetes or hypertension, you lose majority of the financial benefits which you can get from health insurance which excludes pre-existing conditions.
Age is a big factor in premium computations. If you wait until you retire before getting health insurance, the choices will be extremely limited and it’ll be harder to get approved. You can save thousands if you find a plan while you’re younger. Getting a plan at 25 years old can save you as much as 30% on monthly premiums compared to if you get one at 30, and as much as 70% when you’re 40. Time is truly money when we talk about insurance!