PhilHealth fund life only good until Feb 2028 with postponed premium hike – Treasury

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Metro Manila (CNN Philippines, March 2) — The Philippine Health Insurance Corporation would bleed dry in the next seven years unless additional funds are injected into the state insurer, the Bureau of the Treasury said.

National Treasurer Rosalia De Leon warned that the postponement of higher PhilHealth premiums from salaried members would deplete the agency’s available funds.

“The implication is that it will shorten the fund life of PhilHealth by six months from August 2028 to February 2028,” De Leon said during a Senate hearing on Tuesday.

PhilHealth has outstanding liabilities worth ₱6.09 trillion as of end-2020, representing projected medical benefit payments for its members, she added.

The Department of Finance earlier said it cannot accurately assess PhilHealth’s fund life due to its faulty database and IT system.

The Senate Committee on Health and Demography is tackling bills that seek to give the President authority to postpone scheduled premium hikes during times of national emergency, a move meant to ease the financial burden on Filipinos. The House of Representatives approved a similar measure on third and final reading in February.

President Rodrigo Duterte deferred the scheduled monthly contribution increases for 2021.

Mandatory PhilHealth contributions are mandated to increase yearly since 2020 under the Universal Health Care law, which will be sustained until it reaches 5% of monthly income or a ₱5,000 ceiling by 2025.

Those who have a monthly basic salary of ₱10,000 and below shall have a fixed contribution of ₱350 a month effective January 1, or equivalent to a 3.5% rate. Meanwhile, people earning ₱70,000 and higher per month will pay a fixed rate of ₱2,450 monthly.

Without an increase in premium collections this year, PhilHealth will forego ₱20.25 billion from its operating income, followed by a ₱44.4 billion which will not be collected in 2022 as the subsequent contribution increases are also affected.

PhilHealth acting chief operating officer Nerissa Santiago added that this will drive the agency into billions of pesos in losses in the next two years, which would deplete reserve funds to just ₱83.7 billion in 2022 versus the estimated ₱160.6 billion in 2020.

“The law ensures that our healthcare system will be more accessible and responsive,” PhilHealth president and chief executive officer Dante Gierran said. “The corporation supports the various legislative proposals… provided that the subsequent scheduled increases in the premium contributions shall be adjusted to the years following the lifting of the suspension.”

The Budget Department also flagged the need to provide additional funding and improve the agency’s financial position.

Meanwhile, Gierran assured that they have so far accounted for ₱14.2 billion or 95% of the ₱15 billion which the agency reportedly lost to fraud and corruption.

READ: PhilHealth: No ₱15-B lost to corruption

“We would like to assure the good chairman that we will liquidate this fully in due time, hopefully before the end of March of this year,” Gierran told lawmakers.

The state health insurer has been tarnished with corruption allegations in recent years. In August 2020, then president and chief executive officer Ricardo Morales stepped down after a whisteblower employee bared various illegal schemes in PhilHealth which led to the supposedly massive fund depletion. 

The National Bureau of Investigation has filed a complaint with the Ombudsman against Morales and other PhilHealth officials.

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