Leachon challenges PhilHealth’s zero subsidy

Health reform advocate and former independent director of the Philippine Health Insurance Corp. (PhilHealth), Dr. Tony Leachon, on Tuesday filed a petition before the Supreme Court (SC) questioning the constitutionality of the state insurer's zero subsidy in the 2025 General Appropriations Act (GAA).

Leachon argued that the non-inclusion of PhilHealth in the national budget directly contravenes the mandates outlined in existing laws.

Citing Republic Act No. 10351, or the Sin Tax Reform Act of 2012, Leachon said it allocates 80 percent of the remaining balance of the incremental revenue derived from implementing the law for universal health care under the National Health Insurance Program.

Meanwhile, Republic Act No. 11223, otherwise known as the Universal Health Care (UHC) Act, mandates the inclusion in the GAA of the premium subsidy for indirect contributors to be released to PhilHealth, he explained.

“This zero subsidy will set a dangerous precedent which will undermine the Filipinos’ right to health and the mandate for the State to make health care accessible and inclusive, even to paupers, as guaranteed by no less than the Philippine Constitution,” Leachon lamented.

The Bicameral Conference Committee excluded PhilHealth from the 2025 GAA, given its massive reserve funds, reportedly amounting to approximately P600 billion, comprised of its surplus and reserve funds.

Senate President Francis Escudero said that the zero subsidy for PhilHealth is due to its failure. Escudero argued that the health insurer's reserve of P600 billion means it is not performing its job of providing health benefits to Filipinos.

Thus, this defunding should “serve as a wake-up call for them to do their job," according to the Senator.

Leachon said SC Associate Justice Amy Lazaro-Javier disproved this claim during the oral arguments on the PhilHealth fund transfer on February 4.

Lazaro-Javier said that the Commission on Audit's Annual Audit Report shows that “PhilHealth is bankrupt."

Leachon said he views the defunding as a "punitive measure" to teach PhilHealth under the leadership of Emmanuel Ledesma Jr., who was recently replaced as the agency's President and CEO by Dr. Edwin Mercado Jr.

However, the health reform advocate warned that this approach does not hold PhilHealth accountable.

“Congress attempts to punish the members of the PhilHealth Board but lets the Filipinos suffer the consequences of their decision. They want to teach PhilHealth a lesson, but at what cost?" Leachon said, calling it a "betrayal of trust" against Filipinos who rely on PhilHealth for access to healthcare.

'Uphold interests of Filipinos'

With PhilHealth under new leadership, Leachon urged Mercado to "uphold the interests of the public."

Leachon also argued that "there are better ways to address PhilHealth's inefficiencies rather than resorting to subsidy cuts."

"At a time when the country’s health care system is already grappling with numerous issues, the removal of PhilHealth’s funding creates an impression that the government has lost its commitment to providing equitable access to quality health care," he continued.

"It sends a disturbing message — that public welfare is no longer a priority," he added.

The government subsidy withheld from PhilHealth was supposed to cover the premium contributions of indirect contributors or those who cannot pay premiums, including persons with disabilities, members of the Pantawid Pamilyang Pilipino Program (4Ps), senior citizens, and their qualified dependents.

In the 2024 GAA, Congress appropriated a total of P61,514,633 for PhilHealth.

Of this amount, P40,283,404 was allocated for the National Health Insurance Program to be used for the health insurance premiums of indirect contributors; P21,170,000 was earmarked for benefit package improvements under the UHC Law; and P61,229,000 was designated for the health insurance premiums of beneficiaries under the Payapa at Masaganang Pamayanan (PAMANA) Program.