PhilHealth to hike premium rates starting next year

by Jovic Yee, Philippine Daily Inquirer, 13 Oct 2019

MANILA, Philippines — Philippine Health Insurance Corp. (PhilHealth) has yet to draw up additional benefits for its direct contributors, as mandated by a new law. But starting next year, it would impose on them a 0.25-percent premium rate increase, bringing annual contributions to as high as P21,600.

Under the implementing rules and regulations (IRR) of Republic Act No. 11223, or the Universal Health Care (UHC) Act, direct contributors or the salaried workers, professionals and those who have the capacity to pay PhilHealth premiums would see their rates rise from the current 2.75 percent to 5 percent by 2024.

This means that from 2020 to 2024, a person earning at least P10,000 a month would see his premiums go up from P3,600 annually to P6,000.

The IRR also covers overseas Filipino workers (OFWs), who currently pay a fixed annual rate of P2,400.

Each year, PhilHealth will also increase the monthly income cap as covered by the premiums to as high as P60,000, which would bring annual premiums to P21,600.

‘Robin Hood’

By 2024, the income ceiling would be P100,000. Anyone earning that much would need to shell out an annual premium of P60,000.

Under the UHC, all Filipinos would be given “quality and cost-effective” health services that would not cause them financial hardship.

But there is also a need, for those who have the capacity, that they pay their premiums, PhilHealth president Ricardo Morales said at Thursday’s formal signing of the IRR.

He said this is not only because PhilHealth is relying on the premiums to help sustain the UHC but it is also following a 65-35 ratio, with the latter percentage of contributors helping pay for the former.

“It’s the ‘Robin Hood’ configuration of the UHC,” Morales said.

Apart from PhilHealth premium contributions, funding for the UHC would come from the Department of Health’s budget, the Philippine Charity Sweepstakes Office’s charity fund, the Philippine Amusement and Gaming Corp.’s remittances, and shares from six tax revenues.

In the first year alone of the UHC’s implementation, the government would be spending P257 billion. Over the course of five years, or until 2024, rolling out UHC would cost P1.5 trillion.

No new benefits yet

At the formal signing of the IRR, Health Secretary Francisco Duque III acknowledged that under UHC, direct contributors are indeed guaranteed of additional benefit packages.

“It is stated under the law that direct contributors should receive bigger benefits because they are giving bigger premium contributions,” he said. “There’s no problem with that.”

“This will be subject to an actuarial determination by PhilHealth,” Duque said.

He added, “The easiest thing to do is to improve benefits but you have to balance this with the actuarial sustainability.”

Apart from the lack of additional benefit packages, OFW advocates have also expressed concern about the payment of PhilHealth premiums being tied to the issuance of overseas employment certificates (OECs), or exit clearances.

In Section 10 of the IRR, the Philippine Overseas Employment Administration (POEA) was tasked to “ensure that land-based overseas Filipino workers, whether new hires or returning, pay their PhilHealth premiums prior to issuance of the overseas employment certificate.”

Former Labor Undersecretary Susan Ople said the issuance of an OEC was a way “to identify and protect OFWs who followed government-prescribed rules on overseas employment.”

“It was never meant to be used by other agencies as a collection tool,” said Ople, who heads the OFW advocacy group Blas F. Ople Policy Center.

Ople warned that with this provision, more OFWs may be forced to leave the country through backdoor means. “This makes leaving as tourist workers more enticing to avoid all these predeparture expenses,” she said.

Labor migration expert Emmanuel Geslani said that when Section 10 of the IRR regarding OFWs “is enforced, obviously the agencies will shoulder that payment, similar to SSS (Social Security System), which is objectionable to the [recruitment] industry.”

OFWs’ salaries stagnant

Based on POEA data, the deployment of new hires slowed down from 582,816 in 2016 to 420,639 last year. The number of rehired workers also slumped from more than a million in 2016 to just a little over 600,000 last year.

“What does this mean? Two things: there are more workers leaving through the backdoor, and we are no longer as competitive compared to other labor-sending countries since it is getting more expensive to hire Filipinos,” Ople said.

“The salaries of our domestic workers abroad have been stagnant for more than a decade. Asking them to pay that much considering that they will be away from the country for at least two years would cause undue burden given their vulnerable status and work conditions,” she said.