One Major Medical Emergency Away From Going Broke

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The pandemic taught us so much about life in just a short time, like the importance of human connection, our health, our finances, and our faith.

And it has been more difficult for people who lost their jobs or were struck by complications of Covid-19.

Many of us heard and read stories, both from the survivors and the survived, and it is truly heartbreaking. Families have to struggle with all sorts of stresses and even emotional breakdowns.

To top it all off, the family of the Covid-19 patients will have to face another difficulty, this time in their finances.

Many covid patients have hospital bills racked up from hundreds of thousands to more than millions of pesos and pay from their own pockets.

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

The Importance of Health Insurance

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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 would 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 Emergencies

We love our families, and we 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 insurances don’t cater to senior citizens and those with comorbidities as easily to the healthy and young, 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 the covid-19 virus, some other life-threatening illnesses and diseases can be contracted, even accidents that 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.

There are so many illnesses that 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 for half a million pesos is almost impossible in case a financial crisis strikes a family. There will be a possibility of taking loans, applying for government assistance, asking relatives for help, 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, the best way to handle these scenarios is to prepare in advance. It is also essential to talk with other family members to set up a dedicated medical fund for your parents who are getting older.

Re-thinking about emergency funds

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I always write about emergency funds. I even once wrote a blog post identifying 120k as a good number for an emergency fund. However, due to various circumstances that I witnessed during the pandemic, I am re-thinking that amount, 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, therefore, they need insurance.

It’s a paradox of how a low-income family will afford if someone is hospitalized from Covid, terminal diseases like cancer, 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.

Thinking about these facts gives 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, 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.

I hope and pray that this pandemic will soon end. Keep safe, and may our Lord and Savior, Jesus Christ bless and keep us!

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