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THE FINANCIAL SUSTAINABILITY OF PHILHEALTH: CAN THE INCREASING NUMBERS OF FILIPINOS MEET THEIR HEALTH NEEDS IN THE FUTURE

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THE FINANCIAL SUSTAINABILITY OF PHILHEALTH: CAN THE INCREASING NUMBERS OF FILIPINOS MEET THEIR HEALTH NEEDS IN THE FUTURE
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   THE FINANCIAL SUSTAINABILITY OF PHILHEALTH: CAN THE INCREASING NUMBERS OF FILIPINOS MEET THEIR HEALTH NEEDS IN THE FUTURE? Dr. Trinidad S. Osteria    Page 2   The Financial Sustainability of Philhealth: Can the Increasing Numbers of Filipinos Meet Their Health Needs In The Future?   2018 THE FINANCIAL SUSTAINABILITY OF PHILHEALTH: CAN THE INCREASING NUMBERS OF FILIPINOS MEET THEIR HEALTH NEEDS IN THE FUTURE? In a 2012 review, the World Health Organization (WHO) described the country’s health financing system as “fragmented with insufficient government investment, inappropriate incentives for providers, weak social protection and high inequality.”  The Philippines is considered as one of the Asian countries which boasts of a long history of social health insurance system. Former President Fidel V. Ramos signed into law the Republic Act No. 7875, otherwise known as the National Health Insurance Act of 1995, which aims to provide social health insurance coverage to all Filipinos. As compared to its predecessor, the Philippine Medical Care Act of 1969, the National Health Insurance Act offers a more responsive government healthcare program. One of the most salient provisions of the law is the establishment of the Philippine Health Insurance Corporation (PHIC) which is mandated to administer the health insurance program (hereinafter referred to as PhilHealth) of the country in the national and local levels. In keeping with the Kalusugan Pangkalahatan  (Universal Healthcare) Program of the current administration. PhilHealth is envisioned to augment financial risk protection to the Filipino healthcare consumers as its strategic thrusts. The program seeks to expand its enrolment by targeting the underprivileged and the indigents; reduce out-of-pocket spending from poorer sections of the society; and make healthcare services accessible to the public. However, the implementation of the program has been time and again challenged by institutional problems and weaknesses. Introduction  The Philippine Insurance Corporation (PhilHealth)  was created in 1995 to implement universal healthcare coverage in the Philippines. It is a tax-exempt, government-owned and controlled corporation (GOCC) of the Philippines and is attached to the Department of Health. Its stated goal is to ensure the sustainable national health insurance program for all.    Page 3   The Financial Sustainability of Philhealth: Can the Increasing Numbers of Filipinos Meet Their Health Needs In The Future?   2018 The National Health Insurance Act of 1995 (Republic Act 7875) created the Philippine Insurance Corporation (PHIC or PhilHealth) which is tasked to administer the National Health Insurance Program (NHIP). The NHIP is envisioned to provide compulsory health insurance coverage for all as a mechanism that will allow all Filipinos to gain financial access to health services (Manasan, 2008). The PhilHealth took over the erstwhile Philipine Medical Care Commission (or Medicare) whose coverage was limited only to those with regular employment i.e., members of the SSS and GSIS. In contrast, th e PhilHealth’s membership is partitioned into five: (i) the Employed Sector Program, (ii) Overseas Workers program, (iii) Individually Paying Program, (iv) Sponsored Program, and (v) Non-Paying Program. The Employed Sector Program of the PhilHealth calls for the compulsory coverage of all employees in the government and the private sector, including household help and sea-based overseas Filipino workers. All government and private employers are required to register their employees with the PHIC and remit the premium contributions of their employees to PHIC. On the other hand, the Overseas Worker Program (OWP) of the PhilHealth covers all land-based overseas Filipino workers who are registered with the Overseas Workers Welfare Administration (OWWA). Meanwhile, the Individually Paying Program (IPP) includes all self-employed persons, including professionals with their own practice, proprietors of businesses, actors/actresses, directors, freelance writers and photographers, professional athlete, coaches, and trainers, personnel of civic and religious organizations and Philippine-based international organizations, farmers and fisherfolks, daily wage earners such as vendors, transport drivers and operators, and unemployed persons who are not qualified as indigents and parents who are not qualified as dependents. Under this program, health insurance premiums are remitted voluntarily at any accredited payments centers on a quarterly, semi-annual, or annual basis. (ibid.) The Sponsored Program covers the poor or the indigent, i.e., individuals whose income is insufficient for the subsistence of their families. Administrative Order 277 (issued in 1997) mandates the PhilHealth to cover    Page 4   The Financial Sustainability of Philhealth: Can the Increasing Numbers of Filipinos Meet Their Health Needs In The Future?   2018 the poorest 25% of the population in a period of 5 years. The Implementing Rules and Regulations of RA 7875 as amended by RA9241 provide that the members of this program be identified on the basis of a means test using the data from a survey conducted by the Social Welfare and Development Office of the LGU. The Non-Paying Program covers (i) retirees and pensioners of the SSS and the GSIS prior the enactment of RA 7875 and (ii) PhilHealth members who have reached age 60 and over and who have paid at least 120 monthly contributions. In addition to the principal member, the PhilHealth covers without additional premium to the member’s dependents, namely: his/he r legitimate spouse who is not a member in her/his own right, children and stepchildren below 21 years of age, and parents or stepparents 60 years old and above who are not themselves members of PhilHealth. There is no limit to the number of dependents of each member. To broaden the coverage of IPP, PhilHealth launced the “Kalusugan Sigurado at Abot Kaya sa PhilHealth Insurance” or (KASAPI) in August 2005. Under KASAPI, PhilHealth enters into strategic partnerships with organized groups (OGs) such as microfinance institutions, cooperatives, rural banks, and NGOs, many of which specifically serve workers in the informal economy. It is notable that the government allocated enough money in the 2008 General Appropriations Act to cover the national government  ’s share o f the premium contributions of all poor households. This indicates that the constraint in expanding the enrollment in the Sponsored Program very clearly lies on the LGU side which initiates the enrollment process. Premium contributions . Under the Employed Sector Program, the monthly premiums (equal to 2.5% of the monthly salary base of the member) are shared equally by employees and their employers and are remitted to PhilHealth by the employer. The member’s share in the monthly contribution i s deducted and withheld automatically by the employer from the former’s salary/wage. It is then remitted to the PHIC together with the employer’s share.    Page 5   The Financial Sustainability of Philhealth: Can the Increasing Numbers of Filipinos Meet Their Health Needs In The Future?   2018 The minimum monthly base salary is set at PhP 4,000 while the maximum is PhP 30,000 effective January 2007. The maximum salary base was adjusted almost yearly since 2000 to allow more equitable sharing of the contributions. Thus, the maximum monthly salary base rose consistently from PhP 5,500 in 2000, to PhP 7,500 in 2001, PhP 10,000 in 2002, Php 15,000 in 2003, Php 20,000 in 2005, and Php 25,000 in 2006. In contrast, the premium for the Individual Paying Program is uniformly set at PhP 1 200 per year for all members enrolled under this program regardless of the members’ capacity to pay. On the other han d, the premium for Overseas Workers Program is also uniform but equal to PhP 900 per year and is shouldered in full by the member as is the case with IPP. While the premium for the Sponsored Program is also set at PhP 1,200, it is fully subsidized and paid for jointly by the national government, the province and municipality/city where the indigent family resides. The national government and the LGU/s (both province and the municipality/city) share equally (50-50) in the case of LGU belonging to first, second, and third income classes. However, if the LGU belongs to the fourth, fifth, and sixth income classes, the LGU share rises gradually from 10% in the first and second years of enrollment to 50% in the tenth year. Conversely, the share of the national government in the premium subsidy for indigents residing in 4 th -6 th  income class LGUs declines gradually from 90% in the first and second years of enrollment to 50% in the tenth year. The sharing between the province and the city/municipality of the LGU of the premium subsidy is variable. In some areas, the province pays for the entire LGU share. In others, the province and the city/municipality divide the LGU share of the premium subsidy between them, with the exact sharing formula resulting from negotiation between the two levels of local government. Benefits . Principal members and their dependents, regardless of their membership program, are entitled to:
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