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Friday, March 29, 2024

A single health crisis can impoverish underinsured Filipinos

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Even among those with disposable income, Filipinos have always been underinsured—and the consequences they suffer have been nothing short of catastrophic. Putting this urgent need for insurance in sharp perspective is the ongoing COVID-19 pandemic. These days, insurance is often the difference between life and death, health or lingering illness, and financial security or destitution.

Even in pre-COVID-19 Philippines, conditions were already alarming. Some 60 percent of Filipinos who die annually have never even spoken with a doctor or checked into a hospital.

As one of the most recognized global brands and one of the largest and fastest-growing names in life and non-life insurance in the country, AXA monitors Philippine healthcare closely.

“Too many Filipinos are apparently only one healthcare crisis away from poverty. It's so prevalent that there is actually a term for it: ‘medical impoverishment.’ This is a catastrophic healthcare crisis in which the resulting out-of-pocket (OOP) healthcare spending causes a person who was previously not poor to become impoverished,” AXA Philippines President and CEO Rahul Hora said.

“In the long term, the insurance we provide at AXA can be the all-important difference between sickness and death, or financial security and financial ruin. AXA provides the comprehensive insurance that protects that person from risks as he matures and his status changes. We also provide the public, especially the underinsured, the accurate and correct information they need about insurance so they can make informed decisions about their security and welfare,” Hora added.

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Medical impoverishment has been a growing problem even before the pandemic struck.

In 2020, during the first year of the COVID-19 pandemic, healthcare spending in the country increased to 5.6 percent of the country’s GDP, up from 4.7 percent in the previous year. Of the total, 44.7 percent was out-of-pocket spending.

It is then no longer a question of whether Filipinos can afford insurance, but one of how long can they continue to afford to be underinsured.

Knowing the suitable kind of policy that will meet one’s needs is crucial. This lack of knowledge causes many Filipinos to be more than adequately covered in one area, but lacking in others. A lot of employees who have HMO coverage opt not to get health insurance and then choose higher-paying life insurance or more comprehensive car insurance – only to find out the hard way that their HMO coverage has limitations. It does not, for example, replace the money they could be earning if they were not sick, and which they really need, now that they have gotten ill.

“Few understand the individualized nature of insurance. There are several variables to consider when assessing the types of insurance policies a person needs. Aside from aging, people acquire assets such as cars that can be wrecked or houses that can burn down; for most, acquiring such assets was likely the work of a lifetime, and they are virtually irreplaceable. People get married and have kids, so their health and income become even more crucial and thus need better coverage,” Hora said.

Assets are not limited to personal ones. One example is a business enterprise wherein a lot of money, time, and effort have been invested. Insuring a business can cushion it against a hard economic blow. As the COVID-19 era showed, the lack of insurance leaves a business too vulnerable to financial loss or even closure. Many companies that shut down during this time were not necessarily small or new.

Travel also needs to be insured as it incurs considerable expense. It is an experience where many things can and often do go wrong, from delays, lost luggage, cancellations, to – again as we learned during the pandemic – illness and other medical complications. All of these damages can in fact be covered by travel insurance. 

With many-at-risk assets that can be insured, it is preferable, simpler, and more convenient to talk to a single agent who can assess one’s needs, and give the most complete coverage under a single reputable company. With its global stature and wide range of products for life, AXA provides all the insurance any Filipino might need under one roof.  Aside from reducing risks, it can also show how insurance can become a long-term investment and savings that can shield the insurer during hard times. To learn about your uniquely individual insurance needs, book an online appointment with AXA: https://www.axa.com.ph/appointments.

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