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Six-month reprieve from higher Philhealth premiums

Members of the state-run Philippine Health Insurance Corp. (Philhealth) ought to enjoy a six-month reprieve from higher premium contributions due to a “fortuitous event” – the COVID-19 crisis, Rep. Michael Defensor (Anakalusugan) said on Sunday.

“We are in the middle of a once-in-a-century pandemic. Even private preneed companies are declaring a ‘fortuitous event’ to justify delays in the payment of their contractual obligations to thousands of planholders,” Defensor said.

“Surely, Philhealth members also deserve a temporary reprieve from the half percentage point increase in premium contributions,” Defensor, House health committee vice chairperson, said.

Philhealth’s board of directors should meet to consider the six-month suspension of the increase in premium contributions from 3.0 percent to 3.5 percent of the monthly earnings of members, Defensor said.

The national health insurer’s 13-member governing board includes the Secretary of Health, Secretary of Social Welfare and Development, Secretary of Budget and Management, Secretary of Finance and the Secretary of Labor and Employment.

“Our rough estimate is that Philhealth will be postponing less than P500 million worth of incremental premiums on an annual basis from direct contributors,” Defensor said.

“The P500 million is a drop in the bucket for Philhealth. However, if the money is taken from the pockets of salaried employees, especially minimum wage earners, it will add to their financial hardship,” Defensor said.

“In fact, we have many households that used to have two gainfully employed members, but now have only one due to the crisis,” Defensor pointed out.

Philhealth’s registered direct contributors include 14.4 million workers employed by the private sector and 3.6 million overseas Filipino workers (OFWs), according to Defensor.

If necessary, Defensor said Congress should pass a joint resolution calling for the six-month deferment of the increase in premium contributions.

Under the Universal Health Care Law of 2018, premium contributions to Philhealth will increase by half a percentage point every Jan. 1 until it reaches 5.0 percent of a member’s monthly earnings by 2024.

From January to June 2020, Philhealth collected a total of P74.2 billion in premium contributions – P41.7 billion from direct contributors plus P32.5 billion from indirect contributors such as indigents whose premiums are paid for by the government.

Over the same six-month period, Philhealth paid a total of P47.9 billion in claims.

In the whole of 2019, Philhealth collected a total of P146.4 billion in premium contributions – P77.1 billion from direct contributors and P69.3 billion from indirect contributors. That year, Philhealth paid a total of P97.3 billion in claims.

“In an extreme situation wherein claims might exceed contribution collections and administrative expenses due to the pandemic, Philhealth can always dip into its Investment Reserve Fund and the earnings thereof,” Defensor said.

Philhealth’s reserve fund stood at P110 billion as of March 2020. The surplus from premium contributions less claims and administrative expenses goes straight to the reserve fund.

Defensor also cited the need for Philhealth to reduce internal financial losses due to excessive and fraudulent claims, mostly by private hospitals, outpatient service providers and physicians.

“Philhealth should likewise work harder to keep its administrative expenses down,” Defensor said.

Sen. Ralph Recto previously pointed out that Philhealth’s P12 billion in administrative expenses in 2019 “went over and above” the limit set by law, which is 7.5 percent of premium contributions. (Vina de Guzman, bistadodailynews.net)