Health Insurance vs. HMO in the Philippines: What Are the Benefits For You

For many families, HMOs in the Philippines are a literal lifeline. But many employees are now taking additional steps to be more protected. Should you?

Employers regularly contribute both to HMOs and PhilHealth. But global consultancy Willis Towers Watson projects that healthcare costs to Philippine employers could rise by as much as 14.4%. This huge jump could force employers to re-think or even lessen benefits.

As a best practice, you should also re-assess your healthcare protection every few years. Invest some extra income to protect your family's well-being. How to go about it, though? Let's review some basics.

HMOs versus health insurance 

Both of these let you set aside money in advance to pay for healthcare. But there are some key differences between them.

HMOs and how they work 

An HMO (Health Maintenance Organization) is a company hired annually to provide medical services, in return for contributions deducted from your salary. Many of us know HMOs as the "health cards" we present at hospitals.

You choose how much to contribute, and your employer pays a matching share "“ typically 40% employee, 60% employer. In return, you're allotted a consumable amount per year. You can use it for consultations (either in person or teleconsult), hospital stays, medicine, etc. What you do not use by the end of the year returns to the HMO. 

Many HMO plans cover outpatient, in-patient, dental and optical. A few, including Maxicare, Medicard, and Intellicare, provide some mental health coverage as well. 

HMOs are an affordable way to pay for emergencies and predictable expenses. But imagine how quickly a routine hospital stay "“ like childbirth, or dengue "“ could use up your coverage and leave you with an empty tank. That's why we need health insurance.

How to get the most out of your HMOVerify the hospital/doctor network.

Your benefits are valid only at hospitals within the HMO's network. Check that the network includes the hospitals and doctors you prefer, and identify ER and urgent care providers close to your home and your dependents' homes. If you need specialized services like counseling or physical therapy, don't stop at "Yes that's covered." Visit the affiliates near you for yourself.

Understand your company's HMO package. 

Every company's deal is different. So don't wait for an emergency. Read the company website, and consult your HR if anything is unclear. Perhaps, the existing package does not provide what you need? You should still participate, to be covered for basic services. Then find personal health insurance to fill the gaps. 

Enroll your dependents.

Most HMOs allow immediate family "“ a term that now often includes LGBT and common-law partners. 

Finally, remember that your HMO coverage is tied to your employer. If you change jobs, enroll in the new HMO quickly to avoid a long gap in coverage. If you become self-employed, quickly get your own SME or individual plan for yourself and your dependents. 

Health Insurance 

HMO coverage is renewed year-to-year, paid by you and your employer. On the other hand, health insurance is a long-term policy that you buy yourself. It is more expensive but should cover major expenses over many years. Look for a policy that includes critical illness, hospitalization, annual physicals, and preventive care. 

Unlike HMOs, health insurance can be used in any hospital. Once you've paid a certain percentage, your policy is in force. It remains valid as long as you meet your payments. 

How much does this all cost? It depends on the coverage. As a first step, your financial advisor from the insurance company will discuss the right plan for your and the corresponding costs.

Now how do you choose a health insurance company to purchase a plan from? The good news is there are several options at your disposal. But apart from the numbers, it is also worth looking into the company's stability. Will they be around when you make a claim in 10 or 15 years? 

Evaluate carefully, ask questions and do not rush into buying. Some general tips:

Protect your health at any age

If you only now have extra income for insurance, don't worry. It's never too late to better protect yourself and your family. Yes, premiums are lower for young people. But a good insurance advisor will structure the best possible plan for you whatever your age.

Know your health issues and be open about them

Be candid about your health issues. Pre-existing conditions, illnesses that run in your family, a physically dangerous job as these may impact your premiums. But if you fail to disclose them, these conditions could invalidate your policy and leave you with no coverage.

Government benefits: PhilHealth and SSS

These benefits are yours as a Filipino paid for by your taxes, salary deduction, and employer contribution. But they can be hard and time-consuming to collect, so do not rely on them for urgent daily expenses.

PhilHealth is the government's health insurance, paid for by deducting 2.75% of your salary. There are three kinds of benefits: Inpatient, Outpatient, and Z Benefits, for serious illnesses such as cancer. Amounts are limited though, and some private hospitals simply do not accept PhilHealth. Confirm that the hospitals near you accept it, and keep your number handy for emergencies.

You can also tap health benefits from the Social Security System (SSS). The SSS Sickness Benefit covers both hospitalization and Covid-related home quarantine. The maternity benefit is also significant. Visit the SSS Benefits page for helpful videos. 

Medical leave under the law

Some benefits are mandated by law, but paid by your employer. 

If you're injured at work, your employer's disability insurance covers your medical costs. This is not considered a health benefit.

New parents enjoy paid leave: 105 days paid maternity leave, 7 days paid paternity leave. Solo moms receive 15 additional days off, with the option to extend another 30 days. One little-known leave option is the Magna Carta for Women (MCW) Special Leave Benefit. This entitles women to up to 60 calendar days' fully paid leave in order to recover from major gynecological surgery. Examples include hysterectomy, ovarian procedures, and mastectomy.

Consult your company's HR to file ahead for either of these. Under the law, your employer must grant that leave with pay, and keep your job open for you. 

The healthy bottom line

HMOs and health insurance are vital steps that you can take towards a more stable, predictable future. Make it a priority to know your coverage, and to secure the best insurance you can afford.

So between health insurance and an HMO in the Philippines, which one is best for you? Both! Maximize your benefits with an HMO card for emergencies and routine medical visits to accredited hospitals, and health insurance to cover critical illness and major health expenses.

That said, the best (and cheapest!) health plan is prevention. Stick to healthy habits and common-sense diet, exercise, and attitude. This way, you'll keep your coverage comprehensive yet affordable "“ and both your body and budget in fighting shape.

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