National Health Insurance: protecting the poor and the sick

“Social solidarity is about Filipinos caring for each other, it’s about the rich caring for the poor, it’s about the healthy caring for the sick…” – Former PhilHealth CEO Dr. Eduardo Banzon

Some supermodels pay a hefty insurance for body parts like their faces or their long flawless legs. Because they understand their importance to their modeling career, they ready themselves for the high costs of restoring (or losing, if the damage is irreparable) their beauty in case of accidents.

This concept of protection is generally the same with all insurance. More familiar examples, like car and life insurance, show that in essence, any insurance’s aim is to lessen the financial burden of a specific, unexpected future event.

PhilHealth or the National Health Insurance Program (NHIP), an insurance specifically for health, also aims to protect Filipinos from health shocks. While only a few are blessed with eye-pleasing bodily features like those of supermodels, basically everyone, regardless of age, gender, and socio economic background, has an overall health or well-being which is considered a source of productivity that needs to be protected. This is why every Filipino must be enrolled in Philhealth.

Therefore, the government’s mandate as embodied in the PhilHealth program is to create a safety net for all. The need for protection from health shocks is universal and its benefits are critical in restoring individuals’ health and productivity, which essentially are the nation’s wealth.

As PhilHealth is a social health insurance program, it aims to pool risks and resources so that the healthy can pay for the health care costs of the weak and the sick, and subsidize the health care needs of the poor. The larger the extent of risk pooling, the lesser the required premium contributions or the more comprehensive benefit packages will be.

The ideal healthcare situation is where everyone receives primary and preventive health care, and those who get sick can easily access health facilities and check out of the hospital paying the least amount, or at most, with no out-of-pocket expenditure.

To achieve this, PhilHealth is mandated to provide a financing mechanism that covers all Filipinos, matches benefit packages to patients’ needs, and optimizes the relative values of those benefits.

Main Challenges to PhilHealth
Undeniably, the NHI goals are genuinely for the good of the Filipino people. The next questions to ask would be: (1) how should NHIP influence the other players in the health system (especially in ensuring the quality of services of health care providers) and (2) how effectively is it doing its job?
Challenges in increasing the enrollment and coverage of members persist – only 51% of the Filipino population was covered in 2011 (Quimbo, et. al 2013). The lack of effective information dissemination, inadequate number of accessible accredited facilities, and limited menu of benefit packages also lead to underutilization of benefits – only 9 out of 100 Filipinos (9%) received full reimbursement from the program as of 2011 (Quimbo, et. al 2013). PhilHealth must also continue to improve its system of membership verification, claims processing, and transactions handling.

What’s New?

The poorest families’ use of PhilHealth often involve problems in enrollment, utilization and overall out-of-pocket health expenditures.

The compulsory premium contribution (currently an average annual payment of P1,200 and will soon increase to P2,400) is a huge burden for those from the lowest income quintiles. At present their enrollment is made possible through partial or full subsidies of the local and national government. For 2014, however, the national government is devoting about P35 billion (the bulk of which will be sourced from the additional revenues from the Sin Tax Law) to fully subsidize PhilHealth premiums of 14.7 million poor families under the National Household Targeting System-Poverty Reduction. With this, only the national government sponsors the poorest of the poor; the LGUs, can then focus on sponsoring barangay health workers, and nutrition scholars, managing and upgrading hospitals, or other health-promoting activities.

Recent amendments to the Nationl Health Insurance Act also include shifting the Sponsored Program from a system of decentralized identification of poor households (with efforts from the national and the local government units) to a centralized one where only the Department of Social Welfare and Development provides the official list by employing a means test. This aims to remove “politicking” where mayors, congressmen and women might have been wrongfully using the program as carrots to reward allies and favorites.

To address high out-of-pocket health expenditures, especially of the poor, initial steps of action involve strengthening the implementation of the No Balance Billing (NBB) and the Case Rates System. The NBB policy is expected to guarantee that the poorest will no longer have to shell out money after availing themselves of health services in public health facilities. Meanwhile, the Case Rates System, which pays a fixed amount for the treatment of a specific disease or case, partly ensures that health care providers have less incentive to recommend unnecessary procedures or branded medicines (when generic ones are equally fine) that increase patients’ overall costs.

PhilHealth’s other major plan starting this year includes the launch of a new benefit package: the Z MORPH (Z Benefits Rate for Mobility, Orthosis, Rehabilitation, Prosthesis Help), in aside from other special benefit packages that cover catastrophic diseases and outpatient services.

It’s “Social Solidarity”
Not every PhilHealth member gets to enjoy benefits equivalent to his or her premium contributions. Neither are members able to keep their money as ”personal savings” and get them as a lump-sum amount in the future.
But all these seem less important than PhilHealth’s main purpose: “social solidarity.” Paying for one’s monthly PhilHealth premium may have made you a few pesos poorer, but its worth is more than saving a model’s scratched skin. It could mean saving the life of a poor dengue-stricken child at present, or you in the future, when you face a similar life-threatening health condition.

Editor’s note: Aloria is a research assistant of Action for Economic Reforms.

Madeiline Joy Aloria

Aloria is a research assistant of Action for Economic Reforms.

  • GabbyBD

    hi madeline, how are the hospitals taking the NBB policy?

  • Interesting reading. It seems that PhilHealth is a good framework, but we can’t have a solid mansion if the only material available is bamboo.

    The 9% enrollment figure states a clear truth. Too many people, having a decision to make, spend for NOW to put food on the table and pray they don’t get sick. I’m faced with a similar choice under the new law regarding domestic help. I am supposed to set up social security and health insurance for our maid. But I present the decision to her. Which would you rather have, P1,000 per month raise or enrollment in Social Security and PhilHealth? Well she has a 3 year old child to support and the kid’s father took off. You know what the answer would be. Money. Now.

    So I am supposed to deprive her of her choice and enroll her in government programs?

    It is a bit of a personal moral dilemma. Follow the law or follow what a person determines is best for herself?

    Government believes it is responsible for making the choice because government bears the burden of medical care for the indigent if she gets sick. Although the law, I believe, actually imposes that burden on me as her employer.

    Does government bear the burden of medical care for the indigent? Key question here.

    If not, I should be free to make the choice and give my helper a raise. And accept responsibility for medical care if she gets sick while working for me. If she wants a long term retirement or care program, she can buy it. I’m not a socialist employer. I’m a capitalist employer. If she chooses to be among the 91%, its up to her.