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.
AXA Philippines President and CEO Rahul Hora explains the grim reality: “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. 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.”
Last year, the first year of the COVID-19 pandemic, healthcare spending in the Philippines increased to 5.6 percent of the country’s GDP, up from 4.7 percent in the previous year.
More telling is the fact that 44.7 percent of this figure was out-of-pocket spending. Soaring costs of COVID-19 hospitalization, hesitancy to seek healthcare or go to a hospital for fear of healthcare acquired infection (HAI), and fully occupied hospitals imply that during this crisis, the situation now is likely far worse than in 2012.
Given the increased likelihood of the nightmare scenario that medical impoverishment poses, it is no longer really a question of whether Filipinos can afford insurance. What they should ask themselves is whether they can continue to afford to be underinsured.
If there has been a silver lining to the COVID-19 pandemic, it’s that more than at any time in history, Filipinos are becoming acutely aware of the consequences of being underinsured.
Right now, those who have become aware of this dire situation are actively looking for insurance options.
Recognition of the importance of insurance and knowing the suitable kind of policies that will meet one’s needs are two very different things. For instance, it is all too common for Filipinos to mistake personal accident insurance with life insurance.
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.
“Few understand the individualized nature of insurance. There are several variables to consider when assessing the types of insurance 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
