In the 2024 national budget, a provision was inserted that allowed the Department of Finance (DoF) to retrieve “excess funds” from government-owned or -controlled corporations (GOCCs) and place them in a General Fund.

The Philippine Health Insurance Corp. (PHIC) or PhilHealth was later pinpointed as being among the GOCCs with “excess funds,” which a retired doctor-public servant said started the effort to defund the Universal Healthcare (UHC) Act in favor of patronage politics.

Dr. Juan Antonio Perez III, who has worked with nine Health secretaries and three National Economic and Development Authority (NEDA) heads since 1992, said Congress and the DoF had compromised the UHC in conveniently mislabeling PhilHealth funds as government subsidies, and realigning during the bicameral conference P40 billion from PhilHealth to the Medical Assistance to Indigent and Financially Incapacitated Patients (MAIP) program.

The bicam, composed of members of the House and Senate and considered the third legislative chamber, even increased the MAIP allocation since the DoH had only asked for P22.263 billion in the 2024 National Expenditure Program. Funding for the program was raised to P58.093 billion.

Funds taken away from PhilHealth meant 11 million indirect members would not be able to avail of benefits this year. Indirect members are those not capable of paying regular contributions to the health insurance program.

MAIP is favored by legislators since these are allocations for health assistance to constituents through guarantee letters they issue to pay for hospital costs on top of the PhilHealth benefits that usually cover 20 percent to 30 percent of hospital bills.

MAIP would not be necessary if the Department of Health, PhilHealth and local government units strictly implement the UHC law. An efficient UHC implementation would not result in excess funds, which are the accumulation of proceeds from sin taxes and premiums from member contributions.

Perez said that while the Department of Budget and Management (DBM) claims all of this happened because legislators hold the key to the budget, “the final nail in the coffin was driven by the DBM’s inability to advise the President that Congress had cut PhilHealth’s budget for the coverage of millions of Filipinos and that PhilHealth could be adversely affected by a provision that would allow the Department of Finance to take billions more from it.”

Foregoing funding for indirect contributors, who have an average of two dependents each, would mean over 30 million Filipinos will miss their health insurance coverage next year, according to Perez.

“No one can predict who will need healthcare at any given time, which is why the UHC is essential. The fact that only 15 percent of indirect members made claims in 2022 should not be a justification to deny coverage to everyone, particularly the poor and elderly,” he said.

The DoF’s claim that the government has provided excess subsidies to fund the premiums of the poor does not hold water.

PhilHealth’s annual reports and the General Appropriations Acts (GAA) for the period 2010-2022 showed that the GAA-provided “subsidies” were used up and had deficits in 10 of the first 13 years of the social health insurance program, Perez said, citing his group’s computations.

As a result of increased employment with the robust economy, direct contributions to PhilHealth are growing. Its annual reports for 2018-2022 showed membership increased to 7,536,785 who remitted P165.9 billion to the reserve fund, which constitutes at least a third of the total.

“Presuming that the DoF circular ordering the transfer of PhilHealth funds is legal, PhilHealth must still reexamine the source of the P89.9 billion it intends to turn over and ensure that not one peso comes from direct contributions,” Perez indicated.

If even a centavo was sourced from direct contributions, the DoF has illegally dipped into the pockets of contributing members, making it liable for imposing a new tax on PhilHealth members.

As it pans out, the DoF and DBM heads will have to account for waylaying the UHC law that gave hope to many marginalized Filipinos of an inclusive healthcare system.