Members need not panic: PhilHealth has P128-B reserve funds
MANILA, Philippines – The Philippine Health Insurance Corporation (PhilHealth) on Thursday, March 10, belied news reports quoting one of its board members that it is about to go bankrupt in less than a year.
In a report by the government-owned Philippine News Agency – which was carried by several news outlets – PhilHealth board member Eddie Dorotan was supposed to have said that the government-run health insurance company was paying a larger amount for members’ benefits than what it collected through monthly contributions, and thus would be broke in 10 months.
Dorotan, who graced the inauguration of PhilHealth’s local office in Legazpi City on Tuesday, said PhilHealth lost close to P1 billion in 2015 because members’ claims reached P97 billion while it earned only P96 billion.
The report said the “remedial measure to prevent PhilHealth’s financial collapse” was to double its efforts in collecting contributions from delinquent members.
PhilHealth president and CEO Alexander Padilla belied this, citing the health insurance company’s "robust, healthy and substantial” finances.
While he did not deny that they paid P1 billion more in benefit claims than what were collected in premium contributions in 2015, he said PhilHealth "gained about P7 billion from investment income, resulting in positive numbers still.”
"Thus, there is no reason for our members and other stakeholders to worry about our capacity to meet our obligations,” Padilla said. He said 93 million Filipinos are covered by PhilHealth.
Padilla also said PhilHealth is "mandated to maintain a reserve fund level equivalent to two years,” so it cannot suddenly find itself threatened with bankruptcy in a few months. He also explained that PhilHealth has a "pay-as-you-go system, where we immediately translate what we collect into benefit payments for our members."
From P112 billion in 2012, PhilHealth’s reserve funds have grown steadily to P128 billion in 2015,” he said. In the last 5 years, members’ benefit claims increased yearly: P34 billion in 2011, P44 billion in 2012, P55 billion in 2013, P77 billion in 2014, and about P97 billion in 2015.
Meanwhile, Dorotan said on Thursday that he was misquoted in the earlier report. He said he pointed out the P1 billion collection gap in contributions last year, and emphasized that more members could be served if collection efforts in both government and the private sector are intensified.
In a press release on Friday, March 11, PhilHealth also stressed the need to improve its systems and processes to ensure efficient collection of premiums, claims processing, and benefit development.
The social health insurance agency said it has improved its information technology systems, strenghtened its fraud prevention and control mechanisms, and imposed fines on erring health care professionals to protect the insurance funds. – with a report from Rhaydz Barcia/Rappler.com