PhilHealth denies reports health firm is dying in 10 months

MANILA, Philippines – The Philippines Health Insurance Corp. (PhilHealth) on Thursday afternoon allayed the fears of members and stakeholders and denied reports that it can only operate for 10 more months.

PhilHealth president and CEO Alex Padilla clarified that the state health firm remains stable and board member Eddie Dorotan, was misquoted in the report on PhilHealth's supposed funding problems.

“It’s not true... Dorotan was misquoted,” Padilla said in an interview over ANC.

Padilla issued an official statement in response to news reports on Thursday morning that “PhilHealth is dying due to fund payout larger than its members’ monthly contributions and income” and that may have caused panic among PhilHealth’s members and stakeholders.

In its statement, Philhealth stressed that since the stability of the health insurance fund is concerned in the allegedly inaccurate  news reports, it is clarifying that the firm’s finances are healthy. It cited its growth over the last five years and said it remains committed to serving its members.

Philhealth said that it paid about P34 billion in 2011, about P44 billion in 2012, up to P55 billion in 2013, P77 billion in 2014 and about P97 billion in 2015.

“PhilHealth’s finances are as robust, healthy and substantial as ever. Proof of this is our ability to pay for the benefit claims of our members at an amount that has been steadily growing over the last five years,” Padilla said in the statement.

“While we paid P1 billion more than what we collected in premium contributions in 2015, we gained about P7 billion from investment income, resulting in positive numbers still,” he added.

Padilla dismissed the public’s worry that members’ contributions might be insufficient to sustain the state health firm.  

“There is no reason for our members and other stakeholders to worry about our capacity to meet our obligations,” Padilla stressed.

There are 93 million Filipinos who rely on the National Health Insurance Program for their health coverage.

Aside from its income, Padilla also disclosed PhilHealth's reserve funds to show that the firm is still strong and growing. He said the reserve funds have been growing steadily from about P112 billion in 2012 to P128 billion in 2015.

“We are mandated to maintain reserve fund level equivalent to two years so that we can readily address our members’ needs should any eventuality happen. While other social protection programs maintain probably higher levels of reserve funds, we operate on a pay-as-you-go system where we immediately translate what we collect into benefit payments for our members,” Padilla explained.

In the report that came out on Thursday morning, Dorotan was quoted as saying PhilHealth lost almost P1 billion last year as its payment for the benefits of claimants reached P97 billion against returns of only P96 billion. The report added that the state health firm’s gains are from its share in sin tax, member contributions and the earnings from investments.