Getting sick is not a privilege

My brother and sister-in-law, both Filipino-Australian citizens, were rudely awakened by doctors and nurses. Their newborn daughter, barely three days old, had to be taken by an ambulance from this general hospital in Sydney to a special hospital for kids. The baby was monitored to have a faltering heartbeat.

Without hesitation, the doctors performed an open-heart surgery on the baby to enlarge the constricted aorta and allow more blood flow to the heart. Also, a valve from the heart to the lungs needed to be tightened to avoid the inundation of the lungs.

The operation lasted more than 11 hours. The successful operation was all in a day’s work for the specialized medical team. The angelic baby was on her way to recovery. The running bill – A$250,000 – would be covered by the Australian government as medical benefits to its citizens. For the Filipino-Australian couple, they felt thankfulness that that episode in their life happened in Sydney, where they were well taken care of.

If that happened to an average couple in the Philippines, they will be saddled with debt, if they even get to find a creditor. Or they would have spent their lifetime of savings, or would have sold off valuable assets at fire-sale prices to medically save a member of the family. PhilHealth or government insurance would barely cut it. The option for the poor would often be to make do with less expensive treatment available, and then pray hard.

The government does not have the war chest for this. It’s not our government’s entire fault that we are still a Third World country where they cannot bring to the penniless special medical services or costly treatments that can spell the difference between an abbreviated life span and a life that’s full and well-lived.

The private sector helps; although not perfectly, they help a lot. The better employers provide their people with group health insurance – for good reason. If their employees get sick without insurance coverage, there would be a moral obligation for them to help these employees. It’s not only humanitarian; it’s also for a commercial purpose. It’s better to manage your obligations and costs by way of a group health insurance.

Unfortunately, the BIR recently issued a circular that said these premiums for group health insurance paid for by employers are subject to tax.

I am using this forum to request the BIR to reconsider that. In group life insurance, the employees don’t have a choice. They need to be covered to make the business of their employer sustainable, and the group insurance cost also makes the employer’s cost predictable. Thus, this is for the convenience of the employer and not compensation or fringe benefit to the employee. Every working man would rather not get sick, than get sick and be in a hospital bed to avail of the benefit.

Also, employers are helping fill the public medical service gap at their own cost. So the least that the government can do is not make money out of it by collecting tax on group premium costs. To my friends in the Bureau, please help right this wrong.

On the issue of First and Third World country medical services, one can observe a direct correlation between the standard of living index and corruption index. On this note, the Department of Finance’s own PowerPoint presentations show tax leakage at tens of billions. Who should reform first? The government or the equally guilty private sector?

Is it the chicken or the egg? Imagine a true-to-life scenario in the country where a public hospital is literally as crowded as a wet marketplace, except that there are some sitting on Monobloc chairs. Now there are people there requiring urgent medical attention, but there is no space and there are no more doctors. People wait there for hours in pain and hunger.

Now imagine that among those people, there is your own child, or spouse, or parent, needing urgent treatment and the best you can do is to pray hard. Now ask yourself while in this state of helplessness: is it the chicken or the egg?

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He is the Chairman of the Tax Committee, and the Vice Chairman of EMERGE (Educated Marginalized Entrepreneurs Resource Generation) program, of the Management Association of the Philippines (MAP). Email your comments and questions to [email protected]. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.