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Deferment of premium rate hike seen to shorten PhilHealth’s fund life to Feb. 2028 —Treasury

The deferment of the scheduled increases in the PhilHealth premium rates is expected to shorten the fund life of the state health insurer from August 2028 to February 2028.

National Treasurer Rosalia De Leon shared the observation with the Senate Committee on Health and Demography on Tuesday as it tackled the bills seeking to grant the President the power to suspend scheduled PhilHealth premium rate increases in times of national emergency such as the ongoing COVID-19 pandemic.

According to De Leon, a deferment in the premium rate increase, along with the reduction in the number of payors, is expected to result in PhilHealth having a net loss of P17.5 billion this year.

"This is expected to be covered by the institution's reserve fund which will reduce the said fund from P160.6 billion to P143.5 billion," she said.

"The implication is that it will shorten the fund life of PhilHealth by six months from August 2028 to February 2028," she added.

The Universal Health Care Law states that premium contributions to PhilHealth will increase to increments of 0.5% every year, starting 2021 until it reaches the 5% limit in 2025.

For 2021, the increase in the contribution rate would be from the current 3% of the monthly basic salary of the member to 3.5%.

But if the scheduled increase this year will be deferred, De Leon said that the collection of PhilHealth will be reduced by 17.7% or P15.6 billion as compared to the original projection for 2021.

Further, De Leon also said the expected decline in the number of premium contribution payors is at about 5 million, bringing the total number of payors for 2021 to 13 million compared to the original projection of 18 million.

"Accounting for this, we expect a shortfall in the collection amounting to P20.25 billion when compared again to the 2021 original projection," she said.

"We hope these observations that we have shared with the Senate would be useful during this Senate deliberation," she added.

De Leon's observations are similar to the projections of PhilHealth itself. Nerissa Santiago, the state health insurer's acting chief operating officer, explained that before the COVID-19 pandemic, they were expecting a collection of P103 billion from their director contributors.

"Because of the decrease in the number of payors, this decreased to about P96 billion and if we will be deferring the premium increase for one year, this will further decrease to P83 billion, with a total decrease due to number of payors and premium deferment to P20.2 billion," he said.

Santiago added that if the scheduled premium rate hike will also be deferred in 2022, the decrease in PhilHealth collections will even be bigger at P44.4 billion.

Nevertheless, PhilHealth chief Dante Gierran said the agency supports the proposals to grant the President the power to suspend scheduled PhilHealth premium rate hikes "provided that the subsequent scheduled increases in the premium contributions shall be adjusted to the years following the lifting of the suspension."

"This is in order to support the NHIP (National Health Insurance Program) including the increase in PhilHealth benefits provided to all Filipinos," he added.

Senate health panel chair Bong Go said they will consider these observations as they prepare their report on the proposed bills.

The House of Representatives, meanwhile, has already approved their version of the measure on third and final reading. — BM, GMA News