The suspension of the increase in contributions of Philippine Health Insurance Corp. (PhilHealth) members will reduce the agency’s fund life by six months come 2028, a government official said.
Rosalia de Leon, national treasurer, in a Senate hearing said with the deferment in the premium rate in place, together with the expected reduction in the number of payors, PhilHealth is projected to book a net loss of P17.5 billion this year.
“This is expected to be covered by the institution’s reserve fund, which will reduce the said fund from P116.6 billion to P143.5 billion,” de Leon said.
“The implication is that it will shorten the fund life of PhilHealth by six months from August 2028 to February 2028,” she added.
De Leon said the impact of the deferment of the increase is “significant,” as it will reduce the collection of PhilHealth by 17.7 percent or P15.6 billion, when compared to the original projection in 2021.
De Leon said the drop in the number of payors — by about five million from 18 million in the original projection — due to the ongoing health crisis should also be considered.
“Accounting for this, we expect a shortfall in the collection, amounting to P20.25 billion when compared again to the 2021 original projection,” de Leon said.
“Anticipating this, the Board of Directors of PhilHealth reduced its 2021 program expenditures for its primary care benefit package or the Konsultasyong Sulit at Tama by P17 billion,” she added.
De Leon said the total liabilities of PhilHealth, including the contingent liabilities, amounted to P6.09 billion as of Dec. 31, 2020.
Early in January, PhilHealth announced the suspension of its scheduled increase in the contribution of members from 3 percent at present, after President Duterte directed the state insurer to put the plan on hold to cushion the impact of the coronavirus pandemic.
An annual increase of 0.5 percent of a member’s basic salary contributions from 2021 to 2025 is mandated under the Universal Health Care Act.
“Assuming that the premium rate will be increased to 3.5 percent in 2021, the additional contribution of each direct contributor will only range from P50 to P650, depending on their monthly income. This increase will be shared by both employer and employee,” de Leon said.
In the same hearing, PhilHealth president and chief executive officer Dante Gierran said the agency has liquidated 95 percent of the P14.9-billion funds under the interim reimbursement mechanism (IRM).
Gierran the funds were disbursed to 711 healthcare facilities.
The IRM is a system where PhilHealth gives advance payments to qualified hospitals and healthcare facilities so they can have immediate funds for insurance claims to ensure they function during time of crisis.
Last year, PhilHealth became the subject of Senate investigation for alleged irregularities including manipulation of its financial statements, anomalies in the reimbursement of IRM funds, and overpriced purchase of information technology items. – With Raymond Africa