PhilHealth on actuarial life: Present financial standing remains robust

This is with regard to your editorial, “End PhilHealth Monopoly,” published on Sept. 23, 2022. We would like to clarify the following:

By definition, this business model is supposed to allow any given insurance firm to be self-sustaining and able to stand on its own feet, without the need for regular cash infusions from its owners.

As a government-owned and controlled corporation, PhilHealth is mandated to implement the National Health Insurance Program, which basically operates on the principle of social solidarity. It has to sustain the program through the social health insurance contributions of its members. The subsidy that it gets from the government is for the PREMIUM CONTRIBUTIONS of the indirect contributors who are financially incapable to pay premiums, the senior citizens and PWDs which comprise 39 percent of its registered members as of June 2022. THESE ARE NOT SUBSIDY TO OUR OPERATIONS.

But PhilHealth continues to do business, limping from fiscal year to fiscal year by collecting billions of pesos from millions of Filipinos through legally mandated salary deductions, which are augmented by more billions in subsidies from the national government and other state firms.

As explained earlier, the government’s subsidy is not an augmentation or cash infusion being asked by PhilHealth from its owners, but the rightful share of the government for the premiums of indirect contributor-members as stipulated in the law.

Every so often, the agency manages to shock the public with its official admission of its funds’ shorter-than-average actuarial life—a chronic announcement that PhilHealth officials use to justify another hike in contribution from its members, or to lobby for more financial assistance from other state-owned firms.

PhilHealth reiterates that its present financial standing remains robust. The recent pronouncements about our actuarial life refer to estimations based on various scenarios so that appropriate actions can be taken to further prolong and strengthen the fund. This is standard practice in insurance. It is not intended in any way to create panic among the public. PhilHealth only lobbies for what is mandated by law or the government’s share for its 21.5 million indirect contributors. Through this, the agency will be able to sustain the benefits as promised to its members under the Universal Health Care (UHC) Act.

Despite the COVID-19 pandemic, PhilHealth ended 2021 with a net income of P32.84 billion, which is higher by P2.8 billion from the previous year. Its total assets also rose by 27 percent with a total of P347.48 billion in 2021. This performance reflects PhilHealth’s prudence in managing its members’ funds.

Despite the regular hike in contributions, however, PhilHealth gives its members only the most basic benefits that are actually a pittance compared to the level of health insurance coverage in more advanced economies, or those with better thought out policies.

PhilHealth has been and remains committed to the welfare of its members by continuously expanding its benefit portfolio. Aside from the usual case rates, members have also availed of special benefit packages, as well as our Z Benefits for conditions that are financially catastrophic to patients suffering from heart ailments, certain cancers, renal issues, and many others. As an example, PhilHealth pays P600,000 for renal transplants in our accredited Z Benefit providers. There are also expansions in the pipeline as mandated by law subject to health technology assessment and fund viability studies.

On the average, a PhilHealth coverage would mean a 10- to 20-percent reduction in medical bills. It is by no means inconsequential, but it is far from ideal.

Based on latest data, PhilHealth’s AVERAGE support value is at 65.89 percent, which means that for every P100 in hospitalization costs, PhilHealth covers about P66.00. Support value differs based on disease condition and hospital level. Soon, members can expect zero copay/no co-insurance in basic wards of government and upon fulfillment of the UHC mandate.

At the same time, private hospitals and clinics that treat patients covered by PhilHealth insurance have to wait anywhere from one to six months to get reimbursed by the agency for their services.

However, we acknowledge that our claims processing, especially during the height of the pandemic, was affected heavily due to mobility restrictions imposed by national and local authorities, our ranks contracting and some even succumbing to COVID, among others.

Part of its mandate is to also address health insurance fraud, a common problem among health insurance institutions all over the world.

We are hoping that this be given equal merit and space in your newspaper in the interest of fairness and balanced reporting.

DR. SHIRLEY B. DOMINGO, vice president, Corporate Affairs Group, Philippine Health Insurance Corp.