THE Philippine Health Insurance Corp on Tuesday said it may have to close down next year as its funds are being depleted because of low collections and increase in payment benefits for COVID-19 patients.
Nerissa Santiago, PhilHealth vice president for data protection, said PhilHealth expects a net operating loss of P90 billion this year as she projected the state insurer will incur P147 billion in losses by next year.
She said the actuarial life of PhilHealth was reduced to one year from 10 years due to the COVID-19 pandemic.
Santiago said the only thing that could prevent PhilHealth from collapsing is through additional contributions from the government.
Santiago spoke during a Senate hearing into alleged rampant corruption, incompetence and inefficiency at PhilHealth.
Presidential spokesman Harry Roque said government is ready to provide funds to PhilHealth to ensure its survival. He also said PhilHealth does not depend solely on its collections.
Senate minority leader Franklin Drilon said Santiago’s statement that the agency may no longer be able to sustain operations by 2022 due to the high payouts and decreased collections amid the COVID-19 pandemic “is really a cause of concern for the entire country.”
During the Committee of the Whole inquiry, Drilon asked about the state insurance’s actuarial life given the increased utilization during the COVID-19 pandemic.
Santiago responded, “Because of the decreased contribution and increased COVID-19 payout, we are expecting by 2021, we will be on the ‘red’ (alert)… We can only survive with additional subsidy coming from the government.”
Santiago further said that from 10 years, its actuarial life has been reduced to a year due to the pandemic, saying that there will be no more reserve funds by 2021.
Drilon said, “Are you saying in 2022, there will be no PhilHealth?”
Santiago answered in the affirmative, saying that the agency projects net operating losses at P90 billion for 2020 and if the pandemic persists by 2021, operating losses will total P147 billion. She says the PhilHealth system will “collapse” by then.
Drilon then asked the PhilHealth to implement measures to prevent PhilHealth from collapsing.
Drilon said controversies continue to haunt PhilHealth because it does not follow simple auditing rules.
“We are in this mess because of PhilHealth’s non-compliance with rules, including a simple COA rule. That is why we have all these problems because you disregard all the rules designed to protect public funds,” Drilon told PhilHealth president and chief operating officer Ricardo Morales.
Drilon was referring to the Commission on Audit rule that no additional cash advances shall be allowed for any official or employee unless the previous cash advance given to him is first settled or a proper accounting thereof is made.
“Per COA rules, you must first liquidate before further advances be made.”, Drilon reminded PhilHealth upon learning that the agency released about P15 billion to the hospitals from its controversial Interim Reimbursement Mechanisms even if only P1 billion was liquidated.
“Even the name Interim Reimbursement Mechanism is a misnomer because this is not a system of reimbursement but an advance — one with very weak liquidation procedure, ” Drilon said.
