In 2019, the Philippines passed the landmark Universal Health Care (UHC) Act, promising every Filipino protection against healthcare-related financial ruin. Central to this promise was PhilHealth — the country’s primary national health insurer. Yet, nearly four years later, the goal of reducing out-of-pocket (OOP) healthcare expenses to below 20 percent remains elusive, largely due to persistent challenges within PhilHealth itself.

When the law was enacted, Filipino households were paying around 54 percent of their total healthcare expenditures directly from their pockets, pushing approximately 1.5 million citizens into poverty annually. PhilHealth was envisioned as the cornerstone of UHC, meant to dramatically reduce this financial burden by comprehensively covering medical costs.

However, PhilHealth has struggled to fulfill this role effectively. By 2021, household OOP spending was still at 41.5 percent, only a slight improvement from earlier years. Even more troubling, families were paying more in absolute terms — averaging nearly 10,000 per person yearly.

Several key issues within PhilHealth have driven this gap between expectation and reality. First, PhilHealth’s reimbursement rates (or case rates) often fall significantly below actual hospital charges, leaving patients with substantial balances. The insurer has been slow to update these case rates, which have barely kept pace with medical inflation, forcing families to cover the difference out-of-pocket.

Secondly, inefficiencies plague PhilHealth’s operations, particularly delayed payments to healthcare providers. With billions in unpaid claims and lengthy processing times, hospitals face financial strain, prompting some to demand upfront payment from patients or threaten to withdraw from PhilHealth accreditation altogether. Such practices undermine the intended protection of the UHC law.