Round Table Discussion

INTRODUCTION
Philippines health insurance corporation (PHIC) is a premier Government Owned and

Controlled Corporations that its creation is to ensure sustainable, affordable and progressive
social health insurance which endeavours to influence the delivery of accessible quality health
care for all Filipinos.
Access to health is the most pressing concern of most. During adverse changes in
economic conditions, it is not the lack of food, but access to health services and medicines that
figures prominently among households’ concerns, especially among the poor.
Faced with a serious debt problem, the government can account for only 38 percent of
Expenditures in health services. Most health expenses are shouldered by the private
households (55 percent). Private and state health insurance covers only 2 percent and 5
percent, respectively. With the poor, especially the unemployed and under employed among
the most vulnerable to adverse situations, better ways of making health services accessible to
them became, and even now remains, a major challenge. With public health service delivery
functions now devolved, that challenge falls squarely on LGUs. Unfortunately many are as hard
put as the national government, with devolved funds not quite matching the cost of devolved
(especially health) functions. It is this situation that the Phil-Health’s Indigent Program, with its
component capitation scheme, was designed to address. The government saw the health
insurance system, particularly the public health insurance system as its main tool for ensuring
the poor’s access to quality health services. However, fully cognizant of the LGUs’ financial and
health service delivery limitations, a scheme had to be devised to encourage local governments
to use the health insurance system for its poorest constituencies.
At the time the Phil-Health’s Indigent Program was conceptualized in 1997, less than 26
percent of the population (about 22 million) were covered by health insurance, of which the
Phil-Health accounted for close to 90 to 95 percent. The overwhelming majority of those
covered, estimated at more than 95 percent were regularly employed personnel from the
government and private sectors, and their beneficiaries. Some 34,000 cooperative societies also
provide insurance services to the poor. A study conducted by the International Labor
Organization estimated that only 1.25 million were beneficiaries of some 935,600 documented
micro insurance schemes in the Philippines. 6 Of these schemes, only a handful involve the
provision of health insurance services. Considering that members of poor families number close
to 20 million, much needed to be done in terms of health insurance coverage.
One of the hot issues being discussed nowadays which concerns not just one person but
the whole of Filipino citizens as a whole is the alleged liquidity problems of the Philippine
Health Insurance Corporation (PhilHealth). This has been an issue long discussed since the day it
came to burst. This already reached the attentions of those in the law-making body and some
government officials of higher positions.
On August 27, 2009, Dr. Leo Cardona, the Philhealth Regional Vice-President was asked
regarding the alleged insolvency and liquidity problems of the insurance corporation. He said
that the issue was not true for the corporation is solvent and would be staying to continue in
rendering social services for the people. Though he admittedly add that there are under-
collectibles running to some Php 11.1 billion including the Php 2.2 billion collectibles of under
the sponsorship program, Cardona said that the Philhealth can pay all health insurance claims
because of the available money on hand. He also add that national government agencies
particularly those with huge manpower like the Department of Education have not been
updated in the payment of the employer’s counterpart to the monthly contributions. With this,
failure to update premium payments added up to the problem on under-collection.
Furthermore, he revealed that the Department of Budget and Management has back dues for
the period 2001-2005.
Along with that day, in another venue, Senator Loren Legarda, revealed that various
government agencies, offices and units owe the Philippine Health Insurance Corporation
(Philhealth) a total of Php 8,965,697,377 in unpaid employer’s contributions from 2001 to 2008.
According to Sen. Legarda, this report on PhilHealth’s accounts receivables belies Malacañang’s
claim that government has no debts or arrears to Philhealth, which was earlier stated by Budget
Secretary Rolando Andaya. Government’s arrears to PhilHealth was confirmed during a
continuation of a public hearing called by Loren as chair of the Senate committee on health and
demography last Wednesday to look into a proposal for a universal health insurance coverage
for the entire populace specially for the indigents and those belonging to the poor informal
sector. During the hearing, PhilHealth president Dr. Rey Aquino corrected and clarified the
earlier testimonies of PhilHealth’s VP for actuary and maintained that PhilHealth’s financial
standing remains sound, with its funds totalling P91 billion, of which “P63 billion are available
to pay any and all claims of every PhilHealth member and his or her dependents.”
Meanwhile, Congress is prepared to settle what was allegedly owed from Philippine
Health Insurance Corporation (PhilHealth) which amounted to P 19.2 billion. With this, Cebu
Representative Eduardo Gullas said in a statement e-mailed to media outfits Sunday.
“Government should set a positive example for everybody, especially private entities that are
obliged to protect their workers by dutiful paying and remitting their mandatory contributions
to Philhealth. In fact, we are hoping that the Department of Budget and Management included
in the proposed 2010 national budget government’s unpaid obligations to PhilHealth."
PhilHealth reportedly has been losing up to P4 billion annually to fictitious or overstated

claims, mostly involving syndicates in cahoots with unscrupulous health service providers.
With this, issue about this has raised the eyebrows of people, public officials, and other
concerned individuals. This issue may result to a decrease in the trust of people not just with
the Philhealth but also to the government as a whole. Therefore, this has to be tackled, solved
and addressed before it gets worse.

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INTRODUCTION

Philippines health insurance corporation (PHIC) is a premier Government Owned and

PhilHealth reportedly has been losing up to P4 billion annually to fictitious or overstated

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