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Explainer: Why is PhilHealth hiking premium payments in June?

Angelica Y. Yang - Philstar.com
Explainer: Why is PhilHealth hiking premium payments in June?
This undated file photo shows a PhilHealth assistance window
PhilHealth FB Page / File

MANILA, Philippines — State insurer Philippine Health Insurance Corp. (PhilHealth) will be raising its premium rate to 4% by June, which will mean higher deductions from worker paychecks.

The increase, required under the Universal Health Care (UHC) Act, will cover all direct contributors. The UHC mandates the gradual yearly increase of premium rates through 2025, the year that the rate will hit 5%. 

The government had suspended the increases for a year and a half.

Here are the adjustments based on the monthly salaries of PhilHealth members, according to Advisory 2022-0010 issued early May:

  • Those earning P10,000 and below will have to pay P400 every month
     
  • Those receiving P10,000.01 to P79,999.99 need to pay between P400 to P3,200 per month. 
     
  • Those getting P80,000 and up are required to pay P3,200 every month. 

Half of the monthly premium will be deducted from the worker's salary, while the other half will be shouldered by the employer, according to PhilHealth.

Prior to the hike, PhilHealth has been collecting premiums from direct contributors at 3% of their salaries. 

"Members and employers who have already paid their contributions at 3% are advised to generate the corresponding Statement of Premium Account for the paid periods so they can settle the 1% differential payments/remittances until December 31, 2022," PhilHealth President and Chief Executive Officer Dante Gierran said in the advisory.

President Rodrigo Duterte suspended the increase in premium contributions in efforts to ease the burden of workers affected by the COVID-19 pandemic. 

In a May 4 briefing, however, PhilHealth senior manager for formal sector-member management Rex Paul Recoter said they are "duty-bound" to collect the four-percent rate since no law was passed to defer the increase

'Higher deductions'

Members of the House of Representatives filed a Joint Resolution 41 calling for the suspension of the increased premium on May 23. The motion —  introduced by representatives of the Gabriela, Bayan Muna, ACT Teachers and Kabataan partylists — will likely not prosper as the 18th Congress winds down business.  

"Such a premium rate hike will...equate to higher income deductions for wage and salary workers who are struggling with nonstop price hikes of basic goods and services," the lawmakers said. 

They added that PhilHealth has yet to settle unpaid claims of P25.45 billion to several hospitals, including P167 million to the Philippine Heart Center, as of December 2021. 

There is currently a bill in the Senate which seeks to give the president the power to suspend the scheduled increases in the premium rates during national emergencies, public health emergencies or national calamities. It has been pending on second reading since March 2021.

Why this matters

The inflation rate in April 2022 reached 4.9%, the highest in three years, as the prices of basic goods and petroleum products continue to increase. 

Tight global supply in oil, partly worsened by the geopolitical war between Ukraine and Russia, caused domestic pump prices to continually rise this year. 

Lawmakers who filed Joint Resolution 41 believe that the premium rate hike will cancel out the P33 increase granted to minimum-wage workers in Metro Manila.

PhilHealth was embroiled in controversy two years ago when a whistleblower claimed that P15 billion in funds were lost to corruption. The corruption allegations  led to a change in leadership at PhilHealth and charges filed at the Office of the Ombudsman.

READ: Raps filed vs former PhilHealth chief, others

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