How do Wealthy and upper middle-income Filipinos protect their parents vs Medical costs?

[pastornick08]

*If you are an insurance agent, please refrain from replying. I would really prefer to get insights from people in this thread on their strategies.*

Hi Ph Invest, I'm a long-time lurker that's gotten my finances in check and now planning the next 20 years for my wealth and my mother's health.

I want to ask, particularly those who consider themselves wealthy or blessed, how do you protect your parents against hospitalization costs as they are approach their golden years?

Here are some concerns I have after researching:

1. Health Insurance coverage usually cover until 65 or 75. Is this the norm for all health insurances? There's really no way around it?
2. Do you set aside an emergency fund specifically for your parents hospitalization?
3. What are other techniques that you have to protect your parents?
4. Is 2M Php enough of a face value for the health insurance policy?
5. Tax Related Question: is it smarter that I break the benefit to me and my siblings to save on taxes when I get the money from insurance? I am also considering the speed because when the diagnosis comes I want the money ASAP but I also don't want to invite the tax man.
6. Matigas ba talaga ulo ko na ayaw ko ng Health Insurance + VUL Lumpsum benefit (which is usually 50% of the face amount after 65 y/o)?

Facts about myself:

1. I am a 26 y/o earning at the higher range of upper middle-income by PH Standard.
2. I do not prefer life insurance. I would really prefer all the protection during the period when my mom gets hospitalized or gets diagnosed.
3. My mom is 47 y/o. Healthy except for a kidney condition.
4. HMO Coverage @ 250k/p.a./illness
5. I am looking for health insurance because elderly people net 4M in six months in expenses. I do not want to wipe off my savings when these things happen. I want some form of protection.
6. I would like that when my mom receives the diagnosis that my world will not fall apart. I would like to have the confidence in the doctor's room knowing that I have some cushion.

What I am thinking of right now:

1. Just get the normal health insurance that covers until 65 or 75.
2. Then get Sunlife Senior Care when she starts 65.

I have really scoured the internet. I don't think there's any health insurance that covers after 65. I understand it may not be profitable for insurance companies to offer such a service (they'd be out of business).

I hope you can help a breadwinner out. I want to build multi-generational wealth, but one hospitalization will wreck me, considering most of my assets are in Stocks and Government securities.

 

[spammerlover]

@pastornick08 Honestly? The best way to save on medical costs is to have a doctor in the family, or a very close doctor friend

1. Professional fees get waived or extremely lessened due to interpersonal relationships
2. They know the system - exactly what tests are needed and where, how to get discounted medicines/treatments, who to email/contact for medical financial assistance or drugs that are still in testing stages
3. They can consider budget in providing recommendations

Source: multiple prior experiences in the family

 

[r123]

@spammerlover This. super thankful that my papa’s sister is a well-established doctor in our locality. Also encouraged my cousin and sister to really be doctors (their in the med path already school-wise). Parang walang naaadmit na family member namin because mabilis lang nakakapag-diagnose and treat. Tita is in internal med din kasi.

Anyways, we also save up naman for medical expenses pero ang laking help talaga na we have a doctor in the family.

 

[bluecrystal]

@spammerlover You need a team of doctors in your network though. Kasi pag nagkasakit ang matanda may basketball team of doctors lagi. One is the captain your family doctor, one is for the specific disease (nephro, cardio etc ...) then kung may infection a infections disease expert. Kung na ventilate, a pulmo as well.

All asking for PF at the end.

 

[fortuna628]

@bluecrystal Just wondering how do you build connections with Doctors?

 

[spammerlover]

@fortuna628 My two cents.

Assuming you don’t have a doctor in the family (because if you do, their network of batchmates and coworkers will also provide you access to doctors of other specialties) and/or are not in the health sector yourself…

1. Schoolmates - check your HS/college friends and acquaintances, esp if STEM track
2. Neighbors - kung me homeowners’ association or parish/church group near you, try to network there
3. Interest groups - worship groups, hobbyist groups, advocacy groups, NGOs, workplace groups, etc. You might find rin na someone can REFER you to a doctor, or has a doctor relative, etc.

As with all things, try to build a friendship/relationship first before asking for help. Get to know them as people, because people are more likely to do a good deed for friends than for strangers. Networking is a skill - kaya nga sya people SKILL eh - so practice chitchat, being friendly without coming on too strong, and showing interest in other people’s lives.

Again - sometimes who you know is as important (or even moreso) than what you know.

 

[sunlit]

@spammerlover This and they caught illness early stage pa lang saves a lot of money if early palang diagnosed na.

 

[patty89]

@spammerlover This is so true. I had a wound last time and the doctor was asking me to go back every week to change the bandage of my wound and it was 2,500 every single time for less than 10 minutes. Didn’t even clean wound properly. Just changed bandage. My best friend is a doctor and changed it for me for free for weeks even when I insisted to pay.

 

[crystaljos]

@spammerlover pretty much

 

[lorinne2054]

@spammerlover This, this is probably why my Mom is so hell bent on having one of her children become a doctor. My youngest sister will be our gateway to better medical care.

But jokes aside, my parents are covered by my Dad’s HMO.

My Dad earns more than enough so my parents never really worried about medical costs and he has clients who are doctors who have helped us in the past by lowering their professional fees.

My parents are also frugal and have built a emergency fund for future medical expenses.

But I still worry about my parents getting severe illnesses that need constant care like my Lolo who had Parkinson’s and he needed medication for 11 years and special care for 5 of those years. The family (including aunts and uncles) spent a combined amount of P90K-P110K/month on his care + medicines and check ups.

I hope and pray that my parents stay health for as long as possible and if they do get sick, that my siblings and I are able to earn enough to cover the expenses that they can’t.

 

[treewolf]

@pastornick08 Insuring the health of aged person is quite tricky. You're right that most HI covers only up to 60 to 65. In our case, we are securing the potential expenses by allocating a certain amount each month say 50k a month and putting it on an investment vehicle. Same way we are planning our children's education fund.

Now the only question is will it be enough? Nobody knows.

 

[pastornick08]

@treewolf Hi, thank you for answering.

Investment as a personal vehicle for insurance of parents is a GREAT idea!

If 1.2M worth of stocks at 7% dividends that is around 100k being added to your portfolio.

Siguro pag liquidate ko na position ko i just have to worry about capital gains tax. But so far this is a great supplement to an HMO until 65 + a health insurance.

Maraming salamat po for sharing your strategy!

 

[mdsmedia]

@pastornick08 More like 7k being added every month, not 100k. Also, a 7% dividend would be highly optimistic. Most US dividend aristocrat stocks offer between 2-4%. And the payout is usually quarterly. So if dividend yield in the PH is also defined as the annual dividend % like in the US, then that would be akin to putting 7k per month into your coffers based on your 1.2mn portfolio base and 7% dividend yield.

 

[taostish]

@pastornick08 What capital gains tax?

 

[ignissus]

@pastornick08 This is going to sound crass, but the wealthy don't.

Some in the younger generations might get insurance of some type, but most boomers that I know are so afraid of dying that they can't even sit down to consider health insurance. Besides, most medical procedures are out-of-pocket for them, and likely have been for decades.

A major medical problem (to the older generation) is more of a BUSINESS problem than it is a financial one.

 

[rocvisc17]

@ignissus Their business is their insurance. It would give a better return than any insurance policy ever could.

“A plan towards a disaster (in this case death) is a step towards a disaster” is their mindset.

Philhealth still helps though.

 

[curious4christ]

@ignissus This is true. Ultra high net worth individuals don’t concern themselves with insurance because they can afford to self-insure. They have more than enough cushion for medical blows.

 

[gust]

@ignissus For them, medical bills are literally "cost of living." And they wouldn't mind spending a lot just to extend their longevity.

 

[micarmstrong]

@pastornick08 Consider buying hospital stocks. Part ownership of a hospital allows you to get really big discounts as high as 50 percent off lab work procedures, doctor professional fees. Just choose stocks for the hospital you regularly go to or those that are close to where you plan to permanently live. Ask doctor friends if you have any.

 

[frankking110]

@micarmstrong I did the same thing. I purchased the minimum number of shares of stock of a hospital that will be built in the city where my parents live. this was more or less 7 years ago. these stocks are registered under the name of my parents. In that way they can benefit from the discounts for stockholders. In my mind, this was a one time insurance premium that I need to shell out to minimize future medical costs.

Apart from this, 2 years ago, I started setting aside P35k a month which i invested in high yield deposits and in dividend earning stocks for the same purpose of defraying future medical costs of the parents.

btw, I still think that I can be ahead if I invest the funds myself than buying insurance policies thus i did not buy any insurance policy.