Finance Fridays with Capt. Christopher Cervantes

May financial goals ba kayo? Basahin ang mga payo ni Capt. Cervantes kung paano makamit ang mga pangarap mo, kabaro!

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Ronnie has been an Overseas Filipino Worker (OFW) for more than five years.  Like every other OFW, his main reason for working abroad is to provide his family with a better quality of life. He is married and is the sole breadwinner of the family. Moreover, he also provides for his extended family, which includes his five siblings who are still studying. I call this the typical sandwich generation. 

Despite his efforts, he was unable to save money. One day, he received news that his father was suffering from stage 4 liver cancer.  He knew that he couldn’t do anything much at that point, but being a loving son, he still sent his father to a reputable hospital even if there was only a slight chance of survival. After few weeks of battle, his father finally said, “I’m now okay to rest.”  That moment gave Ronnie tremendous pain, both emotional and financial. The thought that lingers in Ronnie’s mind is “If only I was able to prepare a medical plan for my family…”

According to the Philippine Heart Center, nine out of ten Filipinos are prone to heart disease, and the basic cost for treatment can go as high as P1 million. The World Health Organization said that there are 11 Filipinos diagnosed with cancer every hour. But despite all these scary statistics only few Filipinos are financially secured for serious illness. For those who are willing to prepare, the usual question is what type of health plan should I get?  If you are looking for the best fit, I hope this article will help you.

Like all other things that we buy, getting health plan requires personal assessment, research, and sound decision. It is very important to first determine your best option depending on your current and future needs, as well as on your budget. 

For your health protection, you can get HMO (Health Maintenance Organization) or health insurance, or even both. Telling the difference can be difficult.  Some insurance companies offer health insurance with features that are like HMO, and HMO products that operate like a regular insurance. 

So how can we know which is which?

HMO is a prepared health care system provided by a network of local healthcare providers who will refer you to a network specialist or hospitals when you need their services for a fixed annual membership fee.  The key difference between an HMO and health insurance is that HMO provides the promised medical coverage to the member, while in health insurance you have to pay for your medical expense first then have it reimbursed later.

With traditional health insurance, you can obtain medical treatment from any medical provider. You can go to any hospital and choose whoever physician or specialist you might be comfortable with. The maximum benefit and coverage depend on what your policy contract has stated.  After submitting the billing statement and medical certificate, you (the insured) will be able to claim your reimbursement.

HMO offers convenience by allowing you to avail medical services without the hassle of bringing cash.  The only thing you need to do is to present your member’s card. As with the traditional health insurance, you have maximum amount of coverage. However, unlike traditional health insurance, you can only avail of medical services from the accredited hospitals and doctors of an HMO company.

You also cannot “self-refer” to a specialist.  If, for example, you are suffering from intense head pain and worried that you might have brain tumor, you cannot go directly to a brain surgeon to seek an opinion.  Instead, you first need to see a primary-care physician or “PCP” who will determine what type of specialist you might need to consult. But before giving the specialist referral, the PCP will clear your request with the medical group to determine if you are covered by the type of service that you need.  Without the referral, the HMO company will not pay for the treatment rendered by the specialist. 

The good thing with HMOs is that, you don’t need to file a claim to get paid.  All you need to do is to present your card.  In the event that you pay for the bills (if you were rushed to a nearby hospital for an emergency, and the hospital is not accredited), the HMO provider will credit the reimbursement to your card.  With traditional health insurance you need to secure all the documents that the insurance company may require prior getting your claims.

So, which type of health plan is better for you?  I know you know the answer—it depends.  It depends on your particular need.  Traditional health insurance is more flexible with a long-term benefit in nature, but HMOs are generally less expensive. If you have a personal or family doctor who is HMO-accredited, then HMO plan might be good for you. But since the traditional health insurance nowadays has evolved into something new, like VUL, it might be a good idea to have health insurance, as it give you long-term protection while you also invest. 

You don’t need to experience the anguish that Ronnie experienced.  It is very painful to see your family members suffer from illness, but it would be more unbearable if you also have to think about how you are going to pay for the bills. You can protect your health and income by getting an appropriate health plan for you.  But in choosing the right plan, make sure that you do your homework so that you can make informed decision. Once you make the right decision, you will be the one who saves yourself and your family from the worst disaster a critical illness could bring.

E-mail me at [email protected] Visit my web site at www.cardinalbuoy.com. Follow me on Twitter @cervantes_rfp. Chris Cervantes is also the author of best-selling books: “Financial Planning for the Fast Changing World,” “The Seed Money” and “Life Begins.

Christopher Cervantes
CIS, CSR, RFP

Christopher Cervantes was a seafarer for 17 years with shipboard experience from various shipping companies such as: Magsaysay Maritime Corp., Teekay Philippines, Bridge Marine Corp. And OSM Maritime Service.  After retiring from the ship at age 39, he became a financial advocate and is a Registered Financial Planner (RFP), Certified Securities Representative (CSR), and Certified Investment Solicitor (CIS). He founded Cardinal Buoy Financials that guides OFWs, seafarers, businessmen, and ordinary people in achieving their various financial goals.

He is also the author of the books Financial Planning for the Fast Changing World; The Seed Money; and Life Begins. He also writes for The Manila Times, Business Mirror, and Money Sense on topics about personal finance.  He appears on shows such as: ANC on The Money, Oplan Asenso of Radyo Singko, Iba ‘Yong Pinoy of Radyo Singko.  And also, a radio host of Real Finance People at DZEC.