health insurance, investment, life insurance, Personal Finance

HMO Card or Health Insurance?

One of my friends asks me if what she should get if she wants to insure her health, will she get HMO/Health Card or Health Insurance?

I said, it depends to your needs. Some people can get Health Insurance while they are insurable and others can get HMO/Health Card while they are young and it is cheap.

Getting ready for the medical expenses is very important because it expensive to get sick nowadays and if you did not prepare for the medical expenses all of your savings will be wiped out and worst is you will get yourself into debts for you to pay the medical bills.

According to Philippine National Health Accounts (PNHA), Filipinos spent P526.3 Billion for health care in 2013 and majority were paid in cash.  Of that amount, 56.3 percent or P296.5 billion came from out-of-pocket spending. These are expenses paid for by individuals for medicine, medical consultation and hospitalization. It means that Filipinos could have save more money if we consider preparing a form of medical insurance rather than paying it through out of your pocket. It will help Filipinos to spend less on medical expenses if there’s a medical insurance.

Reference: http://bilangpilipino.philstar.com/news/2016/03/31/1567890/philippiness-health-expenditure-climbs-p526-b

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Let’s define HMO:

What is a ‘Health Maintenance Organization – HMO’

A health maintenance organization (HMO) is an organization that provides health coverage with providers under contract. A Health Maintenance Organization (HMO) differs from traditional health insurance by the contracts it has with its providers. These contracts allow for premiums to be lower, because the health providers has the advantage of having patients directed to them; but these contracts also add additional restrictions to the HMO’s members.

Read more: Health Maintenance Organization – HMO Definition | Investopedia http://www.investopedia.com/terms/h/hmo.asp#ixzz4RY7v7ih8

Let’s define Health Insurance:

Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. It is often included in employer benefit packages as a means of enticing quality employees. The cost of health insurance premiums is deductible to the payer, and benefits received are tax-free.

Read more: Health Insurance Definition | Investopedia http://www.investopedia.com/terms/h/healthinsurance.asp#ixzz4RYA2MX9D

The questions is will you get an HMO or Health Insurance? Which option will you choose?

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For me, it is both important. It should complement to each other. Ideally, I position HMO for your short-term needs and Health Insurance will be for your long-term needs. If you will get sick now while you are young, it is good that you have an HMO/Health Card while if you will get sick when you get old, you have your Health Insurance, while if you get sick at a young age while you have your HMO, you can supplement it with your Health Insurance. It is a win-win position to a person who has both HMO/Health card and Health Insurance.

While most of the Filipinos are employed, most of the employers provide HMO/Health Card to their employees which is a good thing but you are not sure if how long will stay to that company and also you will get old and if you get your own HMO/Health Card you will have to pay higher premiums.

Mostly, HMO’s can give you a Maximum Benefit Limit of Ph60,000 to Ph150,000 when a person will be hospitalized and your Health Insurance can give you from Ph300,000 to Ph1,000,000 coverage plus an investment component that will grow that can supplement your medical fund needs in the future. It means in Health Insurance, after you are finished paying for it for 10 years, your money still grows that you can withdraw in the future while on HMO, you just pay every year and your money will not grow. It is wiser to complement these two. You don’t have to spend a lot of money if you will get HMO and Health Insurance rather than if you get sick, it will cost you more.

If you want to know how to choose options how to create a fit HMO and Health Insurance for yourself and for your family you may reach me for a consultation.

Thanks for reading my blog.

If you want to know more about getting a medical insurance, you may fill out the link below and I will contact you soon.

 

Archie M. Yuki
Financial Adviser,Investment Consultant and Insurance Specialist
The Insular Life Assurance Ltd.,Co.
4th floor Karina Bldg., No. 33 Shaw Blvd. Pasig City
Tel No. 571-3274
Mobile Number. 0917-5769607, 0923-4941362
Email Address: archieyuki30@gmail.com
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