Recto debunks PhilHealth claims on increased contributions

An administration senator yesterday debunked claims made by Philippine Health Insurance Corp. (PhilHealth) on the need to increase members’ contributions to bankroll expansion of services and benefit packages since the government has enormous cash reserves and huge subsidies.

PhilHealth, Sen. Ralph Recto revealed, recieved the biggest chunk of the P45.2 billion subsidies allocated government-owned and controlled corporations (GOCCs) last year and is expected to get largest slice in the same programmed subsidy this year in the amount of P18.7 billion.

This is on top of the P1.5 billion PhilHealth’s share in the 2012 budget to cover premium payment arrears covering 2.9 million indigent families.

“What happened to these subsidies? And what are you doing with your billions in retained earnings?” the senator, who is the chairman of the Senate committee on government corporations and public enterprises, asked as he expressed strong opposition to the reported 160-percent increase in members’ premium.

The said policy which also covers overseas Filipino workers (OFWs), contained in PhilHealth Board Resolution No. 1571, will take effect beginning July this year.

Given the more than needed resources, Recto said PhilHealth can also tap its retained earnings, which have peaked to P110 billion in 2010, to bankroll expansion of services and benefits such as reducing “out of pocket expenses” of members.

“PhilHealth can achieve viability and attain efficacy in its delivery of services without having to impose another burden to its members, which is essentially another form of payroll tax,” he said.

Recto also warned that the planned hike in premium payments would hurt struggling small and medium enterprises (SMEs), which have to contend with a buffet of regulatory compliance like membership in Social Security System (SSS), PhilHealth and Pag-IBIG.

“And we’re making it worse by increasing the premium payments of their workers, which are shouldered in part by them,” Recto said, adding that even local government units (LGUs) would be adversely affected by the move and as a result, create havoc in their fiscal planning for this year.

He said job generation would also be stifled as a result of the increase in PhilHealth premiums since companies will have second thoughts hiring more workers for fear of bloating their operating budget.

“I’m not aware of any consultation held on this matter. We are slashing the IRA (internal revenue allotment) of LGUs this year and here we are, making the life of LGUs more difficult by increasing the premiums of PhilHealth members,” the senator, who also chairs the Senate ways and means committee and sits as senior vice chairman of the Senate budget panel, said.

Like deductions for withholding tax, SSS, Government Service Insurance System (GSIS) and Pag-IBIG, PhilHealth contributions are also automatically deducted from the payroll of workers.

He said aside from sitting on its retained earnings that could eclipse by two-fold the entire budget of the Department of Health, PhilHealth is also a consistent top recipient of state subsidies.

In a circular approved by its board, PhilHealth premium contributions for new members will increase from P300 to P600 quarterly or a total of P2,400 per year.

Covered by the increase are members who are earning P25,000 a year based on their income tax returns.  –Angie M. Rosales, Daily Tribune