The facade of the PhilHealth Head Office in Pasig City on September 5, 2020. George Calvelo, ABS-CBN News

MANILA -- The Philippine Health Insurance Corporation (PhilHealth) on Tuesday said the agency's fund transfer to the national government does not include contributions of paying members. 

PhilHealth made the statement as a health reform advocate questioned the fund transfer.

The state-backed health insurer said it "did its due diligence" in complying with the executive department's move to divert excess funds of government-owned and controlled corporations (GOCC) to finance unprogrammed appropriations this year.

In a text message to ABS-CBN News, PhilHealth Corporate Affairs Vice President Rey Baleña said they also consulted several agencies about the fund transfer.

"The transfer of a portion of the PhilHealth fund as approved by the PhilHealth Board of Directors is in compliance to Special Provision 1.d Chapter XLII on Unprogrammed Appropriations of RA 11975 or the General Appropriations Act of 2024; and Department of Finance Circular No. 0003-2024," he said.

"PhilHealth did its due diligence on the matter, with coordination and guidance by the Office of the Government Corporate Counsel, Governance Commission for GOCCs, and the Commission on Audit," Baleña added. 

"The fund to be transferred are those from the unused portion of the National Government subsidy released to PhilHealth through the GAA for Indirect Contributors. No funds from the contributions of paying members are included," he added.

Baleña said abiding by the executive department's order is "in support of the National Government’s thrust and directive to invest in the nation’s economic growth and development, particularly in government infrastructure and social programs". 

PhilHealth pushes for contributions hike, touts wider coverage

"This will not affect in any way the Agency's financial stability. Its members - both the Direct and Indirect Contributors - can rest assured that their PhilHealth benefits will not be affected and will even continue to be expanded and enhanced following the PhilHealth Board's approved benefit plan which already started in 2023," he said. 

"Partner hospitals of PhilHealth can likewise be assured of continuous payment of good and properly filed claims within the prescribed period," he added.

The official also noted that the state insurer has been "aggressively enhancing" its benefit packages for various illnesses.

"Iyong sinasabi ng batas UHC to increase the benefits should there be excess in the funds, nangyayari na po 'yan. For example, our hemodialysis package was expanded to 156 (from 90) sessions and recently enhanced to P4000/session (from 2,600) which translates to a total of P624 thousand per patient per year," Baleña said.

(Provisions under the Universal Health Care Act meant to increase the benefits should there be excess in the funds have already been happening. For example, our hemodialysis package was expanded to 156 (from 90) sessions and recently enhanced to P4000/session (from 2,600) which translates to a total of P624 thousand per patient per year.)

Baleña shared they are also looking into benefit package enhancements for open heart surgeries, other types of cancer, and COVID-19.

'LACK OF FORESIGHT'

The move does not sit well with health advocate Dr. Tony Leachon, who called for an investigation into the issue. 

"Excess funds should not be directed to unprogrammed appropriations within the national budget when PhilHealth has been ineffective at carrying out its mandate of ensuring affordable, acceptable, available and accessible health care services for all citizens of the Philippines," he said in a social media post. 

"Our legislators and policymakers must investigate this terrible lack of foresight and care for Filipino patients," he added.

Leachon insisted that PhilHealth should be held "accountable".

"Further, PhilHealth must be held accountable for its gross negligence and inefficiency. The Department of Finance, too, should revise its Circular to comply with the spirit and letter of the law. So should the Office of the Government Corporate Counsel, instead of attempting to do legal acrobatics to justify a bad decision."

"If a legal challenge is necessary, let it be on behalf of all members of PhilHealth, the Filipino people," he said.

For the former president of the Philippine College of Physicians, "benefit packages have not sufficiently been expanded to reduce out-of-pocket expenditures, especially for the poorest of the poor".

"This (DOF circular) goes against the spirit of the Universal Health Care (UHC) Law or Republic Act No. 11223, which, in Section 11, states that “...whenever actual reserves exceed the required ceiling at the end of the fiscal year, the excess of the PhilHealth reserve fund shall be used to increase the Program’s benefits and to decrease the amount of members’ contributions. No portion of the reserve fund or income thereof shall accrue to the general fund of the national government or to any of its agencies or instrumentalities, including government-owned or controlled corporations," Leachon said.

"It is alarming that despite having excess funds, PhilHealth has yet to comply with the provisions in Section 11 of RA 11223," he added.

Meantime, former Senator Panfilo "Ping" Lacson said the measure "may create some serious security problems." 

"Why? Soldiers and policemen, just like any government employee, are PhilHealth members whose contributions are automatically deducted from their monthly salaries. That being said, our policymakers should rethink their position," he said in a statement. 

"DOF’s explanation that Philhealth’s P500 billion “idle” fund (2021-2023) from government subsidy is not covered under the UHC law may be flawed," he said.

"Even assuming without accepting their argument, the high-cost estimates to fully implement the UHC programs in 2023 and 2024 are P570B and P577B respectively, so how could they describe the same as “idle” when there are still budgetary gaps of P344.7B (2023) and P326.1B (2024)," he added.

'MORE PRUDENT FISCAL OPTION'

The Department of Finance (DOF) on Monday meanwhile the fund transfer.

"Billions in unused and idle funds of government corporations are being marshaled for projects in health, social services, and infrastructure that serve the public, finance growth, and cut poverty," it said in a statement.

"Unlocking these excess fund balances is a more prudent fiscal option than borrowing more or imposing taxes. The move does not affect the viability of participating corporations. It does not impair their delivery of services," it added.

The DOF cited PhilHealth as one of the GOCCs covered by the fund transfer. 

"To give one example, PhilHealth is left with a P500 billion benefit chest, which can fund multiple-year claims," it said. 

"In the case of PhilHealth, unused government subsidies are not part of its reserve funds, nor income that is being restricted by the Universal Health Care Act to be used by the national government as a general fund," the DOF said.

"The merit of this tack is best exemplified by the fact that PhilHealth and other GOCC remittances to the treasury are what enabled the DBM to release P27.5 billion to pay the 5.04 million claims of Covid pandemic era service allowances of frontliners," it explained.

The agency said the Philippine Deposit Insurance Corporation’s (PDIC) also exercised the "same care and diligence... in calibrating the... contribution to the revenue raising effort".

"The result promotes the common good, based on the list of recipients identified in the national budget. Some of these are ongoing Foreign-Assisted Projects (FAPs), such as the Metro Manila Subway Project, the North-South Commuter Railway System, and the PNR South Long Haul Project, among other big-ticket infrastructure projects," the DOF shared. 

"Other FAPs are the Support to Parcelization of Lands for Individual Titling (SPLIT) Project and the Philippine Fisheries and Coastal Resiliency Project," it added.