Ra 7875

National Health Insurance Act of 1995 or "An Act Instituting a National Health
Insurance Program For All Filipinos and Establishing the Philippine Health
Insurance Corporation For the Purpose"
Signed into law on February 14, 1995 by Pres. Fidel Ramos
The National Health Insurance Program (NHIP), formerly known as Medicare, is a

health insurance program for SSS members and their dependents whereby the
health insurance subsidize the sick who may find themselves in need of financial
assistance when they get hospitalized.
The Philippine Health Insurance Corporation or PhilHealth is the mandated

administrator of the Medicare program under the National Health Insurance
Act of 1995 (R.A. 7875)
Capitation is a payment mechanism where a fixed rate, whether per person,
family, household or group is negotiated with the health care provider who
shall be responsible for delivering or arranging the delivery of health services
required by the covered person under the conditions of a health provider
contract.
In 1963, DOH secretary Francisco Quimson Duque, the father of the current DOH secretary,
proposed the formation of a National Health Service of the Philippines under the administration
of President Diosdado Macapagal.
RA 6111 or the Philippine Medical Care Act was signed into law by President Ferdinand Marcos in
1969.
Medicare Program Phase I was started in 1972. Target beneficiaries were SSS/GSIS members.
Medicare Program Phase II was started in 1983. Target beneficiaries were low-income and non-
salary based populations not covered by Phase I. Tie-ups with LGUs and HMOs were done.
In the early 1990s, The Health Finance Development Project (HFDP) a DOH project funded by
USAID-MSH conducted several studies regarding social health insurance and was crucial in the
creation of PhilHealth.
RA 7875 was signed into law on February 14, 1995.
GSIS and SSS transfers the Medicare Program to PhilHealth in 1997.
Abra was the first province in the country to adopt the Indigent Program, October 1, 1997.
Decentralization of claims processing starts in Region VI, March 1999.
Launching of the Individually Paying Program for the Informal Sector, October 1, 1999.
Launching of the first OPD Package in Laguna and Capitation as provider payment scheme,
July 2000.
Introduction of Dialysis Package and OPD AntiTB/DOTS Benefits Package, April 1, 2003.
Maternity Care Package for SVD and SARS package, May 1, 2003.
to accelerate universal coverage (health insurance for ALL Filipinos)
to enhance and expand a unified benefit package that can be used by ALL members,
regardless of category
consolidate separate Medicare programs given by the SSS, GSIS and OWWA
Before PhilHealth was created, there used to be different premium contributions and
different benefit packages for those mandated to have social health insurance. PhilHealth
changed all that by requiring EVERYONE to procure social health insurance. Also, there would be
A SINGLE UNIFIED BENEFIT PACKAGE although premium contributions are still based on
salaries/wages in the case of formal sector employees and on household earnings & assets in the
case of the self-employed. The rich would subsidize the poor and the healthy would subsidize the
sick. (Social Solidarity Concept)
The purpose of PhilHealth is to ensure the provision of affordable, available and
accessible health care services for ALL citizens of the Philippines.
PhilHealths goal is universal coverage (defined as 85% of the Philippine population) by

the year 2010.
Limited to paying for the utilization of health services by the covered beneficiaries or to
purchasing health services in behalf of the beneficiaries.
Prohibited from:
1. Providing health care directly
2. Buying and dispensing drugs and pharmaceuticals
3. Employing physicians and other professionals for the purpose of directly
rendering care
4. Owning or investing in health care facilities
Exempted from paying corporate taxes because it is a government owned and controlled
corporation.
Can sue and be sued in court

Has quasi-judicial powers can issue subpoenas, investigate, and decide upon
complaints. PhilHealth is NOT bound by the technical rules of evidence.
All government and private EMPLOYERS are required to register their employees with
PhilHealth within 30 days after hiring them.
Members and their dependents are eligible for confinements outside the country provided
the following are submitted within 180 days after discharge: official receipt from the health
care institution and certification of the attending physician as to the final diagnosis, period
of confinement and services rendered.
Sec.54 of RA 9241 Oversight Provision Congress shall conduct a regular review of the
National Health Insurance Program which shall entail a systematic evaluation of the
Programs performance, impact or accomplishments with respect to its objectives or
goals. Such review shall be undertaken by the Committees of the Senate and the House
of Representatives which have legislative jurisdiction over the Program. The National
Economic and Development Authority, in coordination with the National Statistics Office
and the National Institutes of Health of the University of the Philippines shall undertake
studies to validate the accomplishments of the program. The budget required to
undertake such study shall come from the income of PhilHealth.
a) legitimate spouse who is not a member
b) unmarried and unemployed legitimate, legitimated, illegitimate, acknowledged children

as appearing in the birth; legally adopted or stepchildren below 21 years of age
c) children who are twenty-one years old or above but suffering from congenital disability,
either physical or mental or any disability acquired that renders them totally dependent
on the member for support
d) parents who are 60 years old or above whose monthly income is below the amount to be
determined by the Corporation in accordance with the guiding principles set for in Article
I of RA 7875
Remember that paramours are not covered by PhilHealth, but illegitimate children are
as long as they are below 21 years of age.
If the children are physically/mentally handicapped, they are still considered

dependents even if they are more than 21 years of age.
Note that parents greater than 60 years old are considered dependents also.
All are appointed by the President of the Philippines
Will each serve a 4-year term renewable for a maximum of two years except for
Cabinet secretaries
Mandated to hold meetings at least once a month. Each would receive a per diem for
every meeting attended
PhilHealth President/CEO qualifications:

Filipino citizen with appropriate training and at least 5 years experience in the filed
of health care financing and corporate management ;
Must NOT be involved in any health care institution as owner or member of its board
1. DOH secretary shall be the ex-officio Chairperson
2. President/CEO of PhilHealth shall be vice-chairperson now classified as a cabinet position
3. DOLE secretary or representative
4. DILG secretary or representative
5. DSWD secretary or representative
6. Representative from the labor sector
7. Representative of employers
8. SSS Administrator or her representative
9. GSIS General manager or his representative
10. Representative of the self-employed sector
11. Representative of Health Care Providers to be endorsed by the national associations of health
care institutions and medical health professionals
12. Vice-Chairperson for the basic sector of the National Anti-Poverty Commission or his
representative
13. Overseas Filipino Workers Sector
The money PhilHealth is working with, has 3 components:
1. Basic benefit funds- finance the basic minimum package to be enjoyed by ALL members.
The National Government and the Local Government Unit pays for the premium
contributions of indigents. For non-indigents, premium prices for specific population shall
be actuarially determined based on
a) Variations in risk;
b) Capacity to pay; and
c) Projected costs of services utilized.
2. Supplementary benefit funds- finance the extension and availment of ADDITIONAL
BENEFITS not included in the basic minimum benefit package BUT approved by the
Board. However, in accordance with the principles of equity and social solidarity, after
5 years, such funds shall be merged into the basic benefit fund.
3. Reserve funds- a portion of PhilHealths accumulated revenues not intended to meet

the cost of the current years expenditures; it shall not exceed a ceiling equivalent to
the amount actuarially estimated for two years of projected program expenditures.
The funds are to be invested in interest-bearing bonds, securities,
deposits/loans/securities to any domestic bank and stocks of corporations.
Administration costs of PhilHealth shall not exceed 12% of the total contributions,
including government contributions to the program AND not more than 3% of the
investment earnings collected during the immediate preceding year.
PhilHealth has the following sources of funds:

1. Premiums
a. Individual
b. National Government
c. Local Government
2. Grants and Donations
3. Investment Earnings
4. Sin Taxes
(any of the following)
1. Birth Certificate
2. Baptismal Certificate
3. GSIS/SSS Members ID
4. Passport
5. Any other valid ID/document acceptable to
the Corporation
1. Inpatient hospital care
a. Room and board
b. Services of health care professionals
c. Diagnostic, laboratory and other medical examination services
d. Use of surgical or medical equipment and facilities
e. Prescription drugs and biologicals; subject to limitations stated in Section 37 of
RA 7875
2. Outpatient care
a. Services of health care professionals
b. Diagnostic, laboratory and other medical examination services
c. Personal preventive services
d. Prescription drugs and biologicals, subject to limitations stated in Section 37 of
RA 7875
3. Health Education Packages
4. Emergency and transfer services
5. Other health care services that PhilHealth shall determine to be appropriate and cost-
effective
In RA 7875, normal obstetrical deliveries, out-patient psychotherapy and
counseling for mental disorders and home & rehabilitation services used to
be part of excluded personal health services. After RA 9241 amended RA
7875, PhilHealth could now include these services in the minimum basic
package. PhilHealth currently pays up to 2 normal spontaneous vaginal
deliveries.
The amount of premium contribution shall NOT exceed 3% of the members
respective monthly salaries to be shared equally by the employer and employee.
The members monthly contribution shall be automatically deducted by the
employer from the formers salary, wage or earnings.
At present, ones premium contribution is 2.5% of the salary base(SB) divided

equally at 1.25% each for the employee and the employer. The salary cap is set at
P25,000, above which ones monthly premium contribution remains the same, e.g.
Ones monthly contribution remains at a total of P625even if ones salary is P25,000,
P50,000 or P500,000 a month.
1. Fee for service
2. Capitation payment
3. Case Payment
Hospital confinements of less than 24 hours shall be compensated only if:
The patient dies
Patient is transferred to another health care institution
Emergency cases
Claims in non-accredited health care institutions shall be compensated if it meets the

following conditions:
Health care institution has DOH license
Emergency case
Physical transfer/referral to accredited health care institution is impossible
Physicians must not charge over and above the professional fees provided by the
NHIP for members admitted to PhilHealth bed.
Offenses of Institutional Health Care Providers(punishments includes a fine bet P10,000-
P50,000, suspension of accreditation for 3 months or more and criminal liability)
1. Padding of claims
2. Making claims for non-admitted patient
3. Extending period of confinement
4. Post-dating of claims
5. Misrepresentation by furnishing false/incorrect information
6. Filing of multiple claims
7. Unjustified admission beyond accredited bed capacity
8. Unauthorized operations beyond service capability
(performing complex procedures in a primary hospital)
9. Fabrication/Possession of fabricated forms and supporting documents
10. Other fraudulent acts
Offenses of Health Care Professionals (punishments includes a fine between P10,000-
P50,000, suspension of accreditation for 6 months-3 years and criminal liability)
1. Misrepresentation by false/incorrect information

2. Breach of warranties of accreditation
3. Other violation whether willful or negligent
Offenses of Employers
1. Failure/Refusal to deduct contributions

2. Failure/Refusal to remit contributions
3. Unlawful deductions
4. Offenses committed by an institution(association, partnership, corporation, etc)

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Ra 7875

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National Health Insurance Act of 1995 or "An Act Instituting a National Health

Signed into law on February 14, 1995 by Pres. Fidel Ramos

The National Health Insurance Program (NHIP), formerly known as Medicare, is a

The Philippine Health Insurance Corporation or PhilHealth is the mandated

GSIS and SSS transfers the Medicare Program to PhilHealth in 1997.

Decentralization of claims processing starts in Region VI, March 1999.

PhilHealths goal is universal coverage (defined as 85% of the Philippine population) by

Can sue and be sued in court

b) unmarried and unemployed legitimate, legitimated, illegitimate, acknowledged children

If the children are physically/mentally handicapped, they are still considered

PhilHealth President/CEO qualifications:

3. Reserve funds- a portion of PhilHealths accumulated revenues not intended to meet

PhilHealth has the following sources of funds:

At present, ones premium contribution is 2.5% of the salary base(SB) divided

Claims in non-accredited health care institutions shall be compensated if it meets the

1. Misrepresentation by false/incorrect information

1. Failure/Refusal to deduct contributions

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