Differences of HMO and Health Insurance

August 24, 2018

For the past years, in the Philippines, going to the doctor for a regular checkup was the least priority of most families unless one is already experiencing physical pain. But the views of many Filipinos have changed over the years. At present, people are more health conscious, and willing to save pleasant amount of money for emergencies or health insurance.

There are two types of private health insurance in the Philippines that provide assistance in an individual’s medical needs – either outpatient or inpatient service, or both:

Health Maintenance Organization (HMO) is renewable every year. You will be provided with a health card that you need to present during outpatient or inpatient availment. Depending on your coverage, this provides up to a maximum allowable benefit amount per illness.

Some employers provide HMO as part of their employees’ benefits, but for others who don’t, getting an HMO would be their last option because it is costly and payment terms are not flexible.  

Health insurance, on the other hand, has flexible payment terms and more plan options to choose from. Cash assistance is provided when you get hospitalized and this is given thru reimbursement form. The insured will receive a fixed daily cash allowance for each day of confinement due to sickness or injury and you have the freedom to choose where and how to spend the money.

This product would be best if you are looking for an affordable health care plan that could ease your financial burden during hospital confinements.

To give you a better understanding between HMO and Health Insurance, please see the comparison below:




(Health Maintenance Organization)

Health Insurance

Based on Paramount Direct’s

Hospital Income Benefit Plan


Premium increases as the member ages

Premium does not increase as you age

Payment term


Monthly, quarterly, semi-annually or annually

Pre-Existing Conditions

Can be covered up to a certain amount during the first year and with additional premium.

Coverage starts on the 3rd year of the policy, with the same premium


Individual or family coverage

Individual, couple or family coverage;

For family coverage, the parents may add all their children from 3 months to 20 years old for a fixed premium

Coverage period

Annually renewable and covers up to 60 years old

Coverage period lasts up to age 70





HMO’s accredited network/hospital

Worldwide acceptance


By application, yearly.

Automatically renews for as long as you pay for your premium

Other benefits

Has access to outpatient care

Provides cash assistance for confinements that last for 30 days or more


Hospital/Clinic will deduct your bill against the allowable limit provided

Philhealth will partially cover bills and the remaining balance will then be paid by HMO

Reimbursement type

Guaranteed cash assistance on top of HMO & Philhealth

Both are helpful for your medical needs and will definitely do more good in the long run. Each type has its own strengths, so if you’re after immediate needs and emergencies, HMO is the best for you. In the contrary, Health Insurance is designed for a long term hospitalization coverage.

It is always best to go after a lifelong coverage that will protect you and your family against unexpected hospital confinements. Paramount Direct offers Hospital Income Benefit Plan, a hospitalization plan for clients aged 20 - 64 years old. Coverage period lasts up to age 70. This provides fixed cash benefits based on the chosen plan at the time of enrollment. What makes this plan different is that it covers pre-existing conditions after two years, providing you with even further protection.

For more options on our Health Insurance products, this link will help you: https://paramountdirect.com/products/health-medical-insurance-philippines.

Sickness is inevitable and may drain your savings quickly that’s why it is important to have a health coverage that keeps your mind at ease knowing that you, your loved ones and finances will be taken care of. Think wisely especially when it comes to keeping yourself and family protected.