Is HMO Mandatory in the Philippines?

Health Maintenance Organizations (HMOs) have become an increasingly popular way to access healthcare in the Philippines. However, there is some confusion around whether getting an HMO plan is mandatory or optional.

What is an HMO?

• A HMO is an organization that provides health insurance plans with coordinated care and controlled costs.

• HMOs bring together healthcare providers to offer medical services to members for a fixed prepaid fee.

• In the Philippines, most HMO plans are offered by private companies to provide affordable managed care.

• HMOs aim to cut costs through negotiated rates and by requiring pre-approval for certain treatments.

• Top HMOs in the Philippines include Maxicare, Medicard, Intellicare, and Pacific Cross.

Is HMO coverage mandatory?

• No, HMO coverage is not mandatory by law in the Philippines. Getting an HMO plan is entirely optional for individuals and employers.

• There is no legal requirement for Filipino citizens to have HMO coverage. It is not compulsory like SSS, PhilHealth or Pag-IBIG contributions.

• Companies and employers are also not obligated to provide HMO benefits to their workforce. It is up to their discretion.

• However, more companies today voluntarily offer HMO benefits to remain competitive and attract talent. But it is still not mandatory.

Why do many Filipinos get HMO coverage?

While not legally compulsory, there are practical reasons why HMOs have become very common:

• Supplements PhilHealth – HMOs help cover gaps for outpatient care and costly inpatient treatments not fully covered by PhilHealth.

• Adds financial protection – HMOs reduce expensive out-of-pocket medical payments through their co-payment and pre-payment system.

• Provides access to quality care – HMO accredited hospitals and doctors are screened to ensure good quality of care.

• Employer-paid benefit – Many employers include HMO membership as an additional benefit for employees and dependents.

• Peace of mind – Having an HMO gives members assurance that they can access medical care when needed.

• Tax benefits – Companies get tax deductions on HMO expenses for employees under the law.

Comparison of HMO and health insurance

While related, HMOs and health insurance have some key differences:

• Coverage – HMOs provide managed care from a network. Insurance offers defined benefits and wider coverage.

• Payments – HMO members pay fixed predictable fees. Insurance policies require variable premiums.

• Providers – HMOs contract specific hospitals and doctors. Insurance gives access to broader provider options.

• Administration – HMOs directly arrange healthcare services. Insurance reimburses expenses per policy terms.

• Purpose – HMOs focus on coordinated low-cost care. Insurance aims to financially cover healthcare costs.

While health insurance is also not mandatory, many get insurance for added financial health protection beyond PhilHealth and HMOs.

Can HMO coverage ever become compulsory?

As of now, the Philippine government has no plans to make HMO membership compulsory or mandatory nationwide.

However, Congress previously proposed bills to regulate HMOs and require mandatory coverage, such as the Health Maintenance Organizations (HMOs) Act of 2004. The main features included:

• Recognizing HMOs as medical service providers with a regulatory framework
• Minimum capitalization requirements for HMOs
• Licensing and regulation under the Insurance Commission
• Suspension or revocation of HMO license for violations
• Requiring companies to provide mandatory HMO coverage to employees

While approved by the Senate, this HMO Act did not pass both houses of Congress to become law. But it indicates that mandated HMO coverage has been considered before and could be proposed again in the future.

Current legal requirements for companies

Currently, the only legal requirements for companies and employers when it comes to healthcare are the following:

• Provide mandatory PhilHealth contributions for employees
• Ensure workplace compliance with occupational health and safety standards
• Provide free emergency medical treatment for work-related injuries or illnesses

There is no legal obligation for companies to offer HMO benefits or any form of health insurance. But many still choose to provide voluntary medical benefits to attract talent, improve productivity and welfare, and reduce absenteeism.

Conclusion