‘PhilHealth rate cut could impact services’

MANILA, Philippines — The proposal to slash the contribution rates of Philippine Health Insurance Corp. (PhilHealth) members may be detrimental to them in the long run as this could impact benefits and services, according to several economists. 

This view backs Finance Secretary Ralph Recto’s stand that PhilHealth should improve on its benefit packages rather than slash contribution rates after the state insurer committed to recommend a reduction to President Marcos.

De La Salle University economist Ma. Ella Oplas emphasized that PhilHealth’s proposal does not make sense.

“If they lower the contribution rate, how will they finance the universal health care? From tax or more debt? How will they improve their services?” Oplas told The STAR.

Currently, PhilHealth members are paying a five-percent premium rate as mandated by the Universal Health Care Act.

“I am for what Secretary Recto is proposing on improving the benefit packages and, maybe, do something about fraudulent claims inside PhilHealth,” Oplas said.

“It does not make sense to lower the rate, especially with inflation. Prices of commodities are high, and yet they want to bring down their contribution. Who would carry the burden, the taxpayers?” she said.

Last week, Recto said he prefers to improve benefit packages to all members to reduce out-of-pocket costs than cutting rates.

The finance chief, however, also admitted that ramping up benefit packages might take time to ensure that there is no wastage and insurance fraud.

“The DOH (Department of Health) and PhilHealth should review the 9,000 case rate (packages) and, maybe, simplify,” he said.

Ateneo de Manila University economist Leonardo Lanzona said it is not an “either-or” proposition for members as they want to get better services at the least possible cost.

“But if so, which is entirely feasible, then this is not a good option. Recto’s proposal of improving services for the same rates comes closer to the ideal arrangement,” Lanzona told The STAR.

Lawmakers say PhilHealth is awash in cash and yet Filipinos are forced to pay high premiums for health insurance.

Recto had already said that PhilHealth is more than sufficiently funded with a P500-billion benefit fund to pay for its members’ multi-year claims.

The agency will also continue to receive subsidies from the government and is expected to increase its benefit packages next year.

While Foundation for Economic Freedom president Calixto Chikiamco prefers a cut in PhilHealth contributions as a micro, small and medium enterprise owner, he said this may not be a wise decision, fiscally speaking.

“Improving benefits would be more favorable since PhilHealth would (just) keep the extra money,” Chikiamco said.

PhilHealth and Recto have been in hot water after the latter ordered the impounding of the agency’s P89.9 billion in “unused” funds to finance projects under unprogrammed appropriations – the latest version of the congressional pork barrel.

The finance circular was based on a provision in the 2024 General Appropriations Act that was inserted by lawmakers during the bicameral conference on the GAA.

The Department of Finance is maintaining the legality of its decision even after several groups asked the Supreme Court to declare as unconstitutional the “rider” in the GAA as well as the DOF circular for the transfer of the PhilHealth funds.

Lanzona maintained that the issue is an efficiency, not legal, question.

“Two points need to be answered since these are public funds. First, how does the government define social benefits, because these should not be limited to growth? In this case, would the size of the transfer, no matter how large or small, affect the achievement of these social ends?” he said.

“Second, would the poor be better off since they would be the ones most affected by these transfers? It is the poor who need the funds the most,” he added.