Philippine Health Insurance Corp. (PhilHealth) has ample fiscal space to slash the mandatory contribution paid by its members, Senate President Francis “Chiz” Escudero said Tuesday. 

Escudero stressed that PhilHealth can afford to bring down its premium rate due to the huge amount of unutilized funds that it has accumulated over the years.

“There is more than enough resources to cover for a reduction in the premium contributions of its members,” he said. 

Citing figures from the Department of Finance, Escudero noted that PhilHealth's reserve fund has now reached nearly P500 billion, plus the substantial annual government subsidy that it receives.

In 2021, the subsidy to PhilHealth amounted to P71.3 billion, P80 billion in 2022, P79 billion in 2023, and for this year, it was down to P40.3 billion.

According to Escudero, the national government provides an annual subsidy to PhilHealth for the implementation of the National Health Insurance Program, primarily to cover the premiums of the indirect contributors, including indigents and senior citizens.

Escudero also pointed out there’s huge subsidies allocated annually to PhilHealth, coupled with its continually increasing reserve fund, “provide the state health insurer ample room to reduce the premium rate of its members.”

Assuming the average subsidy to PhilHealth is at P70 billion, Escudero argued that the government would still be able to reallocate a significant amount of funding for other purposes for seven years—if the said subsidies were to be sourced from the firm’s reserve fund.

“But instead of doing that, one strategy that can be studied is to utilize the reserve fund to bring down the premium rates which is mostly being paid by the government,” he added. 

He lamented that PhilHealth is “losing around P20 billion a year in terms of value by not utilizing its P500 billion reserve fund.”

“For me, that fund should be used to help our fellow Filipinos by improving health services for them or lowering the premium rates,” he added. 

The Senate has already approved the bill seeking to amend Republic Act 11223 or the Universal Health Care (UHC) Act in order to bring down the premium rate for direct contributors of PhilHealth.

Under Senate Bill 2620, PhilHealth’s premium rate will go down to 3.25 percent from the current 5 percent, then this will gradually be increased to 3.5 percent in 2026, 3.75 percent in 2027, and 4 percent in 2028.

The House of Representatives is also deliberating two different measures seeking to amend the UHC Act.

Escudero is urging PhilHealth to adjust its case rates based on the amount of contributions paid by its members.

Just like other insurance products, Escudero said members who pay bigger premiums should be entitled to higher case rates, if and when they require medical attention.

He noted that this “adjustment mechanism” for premiums and benefits was also mentioned by President Ferdinand Marcos Jr. himself during the recently held Legislative-Executive Development Advisory Council meeting in Malacañang.