Rat Race Running

Last Updated on April 10, 2023

The pandemic taught us so much about life in a short time, like the importance of human connections, health, finances, and faith. It also showed that most of us are one medical emergency from going broke.

During the pandemic, many patients had hospital bills that racked up hundreds of thousands to more than millions of pesos for their accounts and had to pay from their pockets.

And for many families, hospitalization and medication costs far exceed their financial capability, even with the help of PhilHealth, GSIS, SSS, and PCSO.

Aside from the pandemic, there are also all other medical emergencies that will come our way, especially for older adults and more vulnerable groups, emphasizing the importance of our health.

The Importance of Health Insurance

For many people, life and health insurance are often not prioritized.

It’s sad or even ironic that when people needed them most and wanted to avail themselves, they were already too late and no longer qualified.

But it is also reasonably understandable since many people prioritize their sustenance, such as food, rent, and utilities, over something they don’t know if they’ll ever use. The low-income base in our country also adds to the burden.

So it is crucial as early as today, maybe more important than ever, to have an insurance policy while we are younger, healthier, and still insurable.

Families and Medical Emergencies

We love our families and will do almost everything within our capability to help them, especially in times of emergency. 

However, a lot of realizations happened during this time of the pandemic.

Most health insurance doesn’t cater to senior citizens and those with comorbidities as easily to the young and healthy, which is understandable when looking at the company’s financial viewpoint.

That is where the problem lies. Most of the family’s medical emergencies happen to senior citizens and those with pre-existing medical conditions.

It became a grim reality that aside from the constant threat of contracting the disease and hospitalization, is the reality that our health care in the country is not cheap.

Aside from COVID-19, some other life-threatening illnesses and diseases can be contracted, even accidents may happen, and the treatments are usually expensive.

Though health insurances and HMOs are a great help during these times, most of these benefits can only extend for a certain amount and age (usually up to 65) to our immediate family members, like our parents.

So many illnesses can cost north of P500,000.00 if we’re being conservative with our estimates, which, to be honest, many families are not prepared to handle.

So What Can We Do?

Saving half a million pesos is almost impossible if a financial crisis strikes a family. There will be a possibility of taking loans, applying for government assistance, asking relatives for help, and setting up GoFundMe or GCash Accounts, among others.

For families with the elderly, it is also not a surprise when health and medical emergencies happen. So, preparing in advance is the best way to handle these scenarios.

It is also essential to talk with other family members to set up a dedicated medical fund for your parents who are getting older.

Rethinking Emergency Funds

I always write about emergency funds. I even once wrote a blog post identifying 120k as a good number for an emergency fund. 

However, I am rethinking increasing that amount due to various circumstances I witnessed during the pandemic, especially for breadwinners.

Most older people are no longer insurable since they are prone to more illnesses and diseases. And since they are prone to such conditions and diseases, they need insurance.

It’s a paradox of how a low-income family will afford it if someone is hospitalized for various lifestyle and age-related illnesses or a major accident.

Another consideration is the price range of hospitalizations in different provinces. The prices can be higher or lower, depending on your location. So, adjust the amount accordingly.

These facts give me an estimate that an emergency fund should be at least one year’s worth of your salary or P500,000, whichever is higher. It is just never a bad idea to be prepared.

You can place a portion in a traditional bank, a digital bank, and other low-risk and liquid investments, such as bonds. And since it is a large sum, it may take longer than expected.

Final Thought:

Emergency funds are essential, and that’s a fact. The next question is how much should an emergency fund be.

The pandemic taught us so much about many things, but our finances have been one of the most impactful.