HMO vs health insurance: what is the difference?

An HMO arranges your care and pays its own network of hospitals and doctors directly, up to the plan’s limits. A health insurance policy pays money under the policy’s terms: it pays back what you spent, or pays a fixed cash amount, whichever the policy says. Both are regulated by the Insurance Commission.

Scroll the table sideways for more

These describe how each kind usually works. A given plan or policy can differ, and its own terms decide.

How each pays at the hospital

With an HMO, you show your card at a hospital in the network. For a planned stay or test, the hospital asks the HMO for approval, a letter of authorization, and the HMO pays the hospital up to the limit. You pay what is above the limit and anything the plan excludes.

With a health insurance policy, you usually pay the hospital first and then file a claim with receipts and the medical report. Some insurers can also pay the hospital directly. A hospital cash policy simply pays you the fixed amount per day in hospital, whatever the bill.

Limits and exclusions compared

• The yearly limit. An HMO plan has a maximum benefit limit. A health insurance policy has its own sum or daily amount. Above either one, you pay.
• Inpatient and outpatient. HMO plans often include inpatient and outpatient care. Many health insurance policies pay only for hospital stays.
• Pre-existing conditions. For HMO and health insurance contracts that exclude pre-existing conditions, the IC limits how far back the company can look for a pre-existing condition (two years at most) and how long you can be made to wait for it to be covered (one year at most) (IC Circular Letters 2018-65 and 2018-66).
• Age and renewal. Both set age limits for joining and renewing, and the cost usually rises with age. Check the renewal terms before you rely on a plan for an older parent.

Where PhilHealth fits

Every Filipino is part of PhilHealth’s national health insurance programme (RA 11223, Sec. 5). PhilHealth pays set amounts toward a hospital bill. The Universal Health Care Act asks PhilHealth, private insurers and HMOs to coordinate so that no benefit is unnecessarily dropped (Sec. 28(e)), and its rules say HMOs and private insurers cover the amenities and services PhilHealth does not, subject to the contracts members have with them (IRR Sec. 28.23). For primary care under its YAKAP programme, PhilHealth said on 1 October 2026 that it is the first source of cover and that the HMOs and private insurers that signed the agreement, as secondary payers, can pay costs above PhilHealth’s limits. For a hospital stay, ask the hospital’s billing office and your HMO or insurer how PhilHealth’s amount is applied to your bill. What PhilHealth pays is in PhilHealth benefits.

When people combine them

Families often hold more than one kind of cover, because each pays in a different way. Three common situations:

• A young family. An HMO plan for check-ups, children’s illnesses and short hospital stays, with PhilHealth underneath. Some add a life policy with a health rider for larger bills.
• A parent over 60. HMO plans can be hard to join at this age. A health insurance or hospital cash policy that still accepts older applicants, or a critical illness policy, can sit next to PhilHealth. See cover for seniors.
• An OFW abroad. Health care in the country of work comes first, often through the employer. Philippine HMO cards are used mainly in the Philippines, so OFWs look at cover for visits home and for family at home.

For a lump sum on diagnosis instead of payment for care, see critical illness insurance.

For all the kinds of health cover, see health insurance in the Philippines.

To compare HMO plans, see HMOs in the Philippines.

This page explains how HMO plans and health insurance generally work. It does not describe any company’s product.