Should You Choose HMO Or Health Insurance For Your Family?

Should You Choose HMO Or Health Insurance For Your Family?

Our mortal bodies are not impervious to sickness and calamity, thus the need for medicine and healthcare. You can never know when a medical emergency will happen, and being caught unprepared can land you in dire straits even if you do make a full physical recovery from an illness or accident.

Health insurance acts as a safety net in the event that we are caught with expensive medical bills. However, not many people are adequately insured in the Philippines.

A private health insurance is an investment that could easily eat up a huge portion of an average Filipino’s monthly income. Because of the cost that comes with it, most people just settle for what’s the most affordable rather than what they really need.

While PhilHealth is a big help to ease your medical expenses, its coverage fall short when it comes to compensating long term hospitalizations and severe illnesses that involve expensive treatment and procedures.

That’s why despite the recent move of the government to provide a more inclusive PhilHealth membership, fact remains that subscribing to a private health insurance will provide you a more reliable financial safety net against unforeseen medical emergencies.

There are two types of private health insurance in the Philippines: Health Maintenance Organizations (HMO) and health insurance policies.  While they both have the same end goal, they deliver their services contrastingly. Each has their own share of benefits, but they work differently depending on your situation.

So, which should you go for? Here three types of medical insurance you can get in the Philippines:

  1. Philhealth

PhilHealth is the health insurance provider run by the government. It is an affordable and progressive insurance program that extends financial assistance to all citizens seeking medical help, whether employed or unemployed. Membership is compulsory for all employees and half of the monthly contribution is covered by the employer while the other half is deducted from the employees’ salary. The amount of financial assistance it extends to its members will vary according to the disease.

If you want to learn more, check out our extensive coverage about PhilHealth and find out its benefits and advantages for members.

  1. HMO

Health Maintenance Organizations (HMO) are private providers of healthcare insurance, except they give you access to doctors within their network. Plans are usually comprehensive and customizable but are only limited to a certain amount annually. The bigger the premium the employer or individual is paying, the higher the annual allowance.

HMOs administer programs such as:

  • inpatient/outpatient services
  • surgeries
  • other ancillary services such as laboratory tests and medication

Some of the well-known HMO providers in the Philippines are Medicard, Maxicare, Intellicare, and Fortune Care. This is commonly provided to employees in private companies, on top of their PhilHealth membership contribution.

  1. Health insurance

Private health insurance gives access to more comprehensive private healthcare networks, offering a lot more than HMOs do. In the Philippines, a private health insurance is usually bought by the individual voluntarily. There are some companies that provide this type of insurance to their employees.

Premiums can be steep and are fully paid by the insured. Immediate family members can be also insured on the policy at an additional cost. Private insurers offer many benefits and features. Their facilities are usually at par with international standards and some even extend their policy outside the country.

The benefit of this insurance can include the following:

  • inpatient/outpatient services
  • hospitalization and surgical assistance
  • cash assistance for loss of income due to accident/illness
  • other ancillary services such as laboratory tests and medication
  • Bigger cash compensation depending on the illness

Some of the well-known companies in the Philippines are Sun Life, AXA, Prudential Life, and Manulife. You can also compare health insurance providers on our site for a quick reference.

 

In-depth breakdown and comparison

While the goal of all these health insurance providers in the Philippines is to cover their policyholders’ or members’ medical expenses, the method or medium they use to transmit their services are different.

Health insuranceHMOPhilHealth
Provider Insurance companies HMO companies Government
Governing agency Insurance Commission Insurance Commission Government/ DOH
Coverage age16-75 Up to 65 only No age limit.

Senior citizens are automatically covered for free.
Policy termFixed term Yearly renewal and subject to health status assessment. Senior citizens - indefinite

Non-senior members - for as long as they're actively paying.
Premium Premium increases according to age. Premium increases according to age. Constant, unless government impose changes.
Benefits 1. Some providers include Life insurance saving (dividends/fund values)

2. Hospitalization
3.Critical illness benefit

4. Some outpatient benefits
1. Hospitalization

2. Emergency hospitalization

3. Outpatient consultation

4. Dental services (depending on the plan)
Cash assistance (fixed amount) depending on the illness.
Critical illness benefits Lump sum cash if policyholder is diagnosed with a critical or terminal disease. Covered by the policy but is limited to the consumable amount set by the HMO. Z benefits package - subsidize specific amount for treatment and hospitalization depending on the illness.
Daily hospitalization Daily hospital income benefit is provided. The amount varies according to the plan chosen by the policyholder. Divided into 3 categories:
1. Ward type
2. Semi private

3. Private

The type of room provided will depend on the coverage or the HMO plan.
Case dependent. Will vary depending on the availability of rooms and case of patient.
Transmittal of financial subsidy or assistance Reimbursement The accredited hospital or clinic will charge your bill against the consumable limit or amount provided by the HMO.

Just provide HMO card.
Automatically deducted from the hospital bill.
When policy is not used after a year or in the contract period Earn dividends which can be withdrawn.Policy defaults back after 1 calendar year and your contribution whether or not you’ve consumed your annual limit.Contribution will be added to PhilHealth’s fund to extend financial assistance to their members who are in need.

How much do they cost?

Name / Type Cost per year
PhilHealth₱1,400 to ₱6,600 (depending on your salary range)
HMO₱10,000 to ₱60,000 (depending on the coverage)
Health insurance₱40,000 (the lowest available plan) and up.

Which type of insurance should you have?

Each of these types of insurance has their own merits. While they may work differently in subsidizing your healthcare expenses, they can work together to further ease you from financial burden. It may cost you more to have all three, but they can be your safety net when you and your family face a dreadful illness that requires expensive treatment and health maintenance.

Each one of them has their own strengths:

  • HMO is for immediate needs and emergencies. In case of an illness, you can just present your HMO card to any (accredited) hospitals or clinic and you’ll be spared from paying upfront to get the help that you need.
  • Health Insurance provides better and more comprehensive coverage for serious illnesses as they grant higher compensation, which is helpful for long term hospitalizations and more expensive treatment and medical procedures. The attached investments and traditional plans are just a bonus.
  • PhilHealth – by default every employed individual has this. While it may not offer as much as HMOs and private health insurance policies, Z-benefits in particular can be helpful in subsidizing your expenses for critical illnesses.

If given that you have enough resources, buying both will definitely do you more good in the long run. However, if your current financial state limits you to just choosing one, it will all boil down to its coverage.

Do you just want a fuss free health insurance that gives you access to healthcare facilities whenever you need it without having to shell out even a little cash? Then go for an HMO.

If you’re willing to pay more, work on a reimbursement type of health insurance in exchange for a lifelong coverage, while building up an investment profile on the side – health insurance policy is the way to go.

Whichever option you choose, ensure you are balancing both adequate coverage and affordable premium.

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