As mandated by legislation, in January 2024 the Philippine Well being Insurance coverage Company (PhilHealth), which gives common medical insurance protection to all Filipinos, started implementing a premium improve. Contributions are set to hit 5 % of earnings on these making between 10,000 Philippine pesos ($178) and 100,000 pesos ($1,780) per 30 days. Virtually instantly, Well being Secretary Ted Herbosa requested this motion be reviewed by the chief department, which President Ferdinand Marcos Jr. is now doing. It seems likely the premium improve will likely be postponed or suspended.
PhilHealth in its present kind is a product of a 2019 universal healthcare law handed in the course of the Duterte presidency. It’s a state-run insurance coverage fund, and after the passage of the legislation all Filipino residents had been routinely enrolled. Annual premium will increase had been constructed into the textual content of the legislation, which states that by 2024 eligible direct contributors needs to be paying 5 % of their earnings in premiums.
This was in all probability finished to make sure that the fund may meet its monetary obligations because it expanded and improved protection. However with inflation on the rise, a scheduled premium improve was already suspended in 2023 and it now appears possible the ultimate hike will likely be rolled again as properly. That might not be a nasty concept.
PhilHealth has been round and offering medical insurance for a very long time. Again in 2013, an annual statistical report claimed PhilHealth had just below 77 million coated beneficiaries, an estimated 79 % of the nation’s complete inhabitants at the moment. The 2019 legislation ensured that protection was routinely prolonged to everybody, whereas enhancing advantages in addition to administrative procedures. By 2022, PhilHealth was masking 104 million folks.
The fundamental concept is that PhilHealth expanded protection after which began charging increased premiums to pay for higher advantages for extra folks. About 37 % of beneficiaries, primarily the aged and people with very low incomes, have their premiums sponsored by the federal government. The premium fee in 2019 was set at 2.75 % of earnings, and was supposed to increase incrementally yearly till reaching 5 % in 2024. Now that seems to be on maintain.
And if we have a look at PhilHealth’s financial statements, it appears to be doing fairly alright. Premium funds rose from 134 billion pesos in 2018 to 217 billion pesos in 2022, a rise of 62 %. Clearly, you’d count on that when the legislation consists of obligatory premium hikes. Nevertheless it’s not simply income that’s up. PhilHealth is posting massive income, with 2022 internet earnings of 76 billion pesos. By comparability, internet earnings in 2018 was 21 billion pesos.
These earnings are being reinvested yearly, which has brought about the asset facet of PhilHealth’s stability sheet to balloon because the legislation was handed in 2019. PhilHealth’s complete property had been recorded at 451 billion pesos in 2022, which included 126 billion pesos in time deposits and 281 billion pesos in funding securities, principally authorities bonds. In 2018, complete property stood at simply 177 billion pesos.
That is what you count on to see from an insurance coverage firm. Premiums are paid in, claims are paid out, and the excess is invested in secure interest-earning property like bonds and financial institution deposits. An insurance coverage firm like PhilHealth, which is masking each individual within the nation, must preserve a variety of property on the stability sheet as a result of they don’t pay out all their claims without delay, however slightly count on to pay out claims steadily over the complete lifetime of each insured beneficiary.
One fascinating query this raises, nonetheless, is whether or not PhilHealth is just too worthwhile. State-run insurance coverage funds needs to be fiscally solvent and sustainable, however the aim mustn’t essentially be to extract massive income from beneficiaries. So how a lot is an excessive amount of revenue? That may be a query greatest left to the philosophers, however what we are able to say is that PhilHealth is clearing properly over $1 billion a yr in working money move, and that’s earlier than the most recent premium improve has even kicked in.
This isn’t uncommon within the Philippines the place public providers, like municipal water or electricity, usually have excessive ranges of entry but additionally hit shoppers with excessive costs. On condition that inflationary strain stays a serious concern within the Philippines, and that PhilHealth’s funds are stable and the fund will not be in imminent want of extra earnings, suspending the most recent premium improve looks as if a fairly simple choice for the federal government.
