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House bill reducing PhilHealth premium rate to 3.5% clears 2nd reading

MANILA, Philippines — The House of Representatives passed on second reading a bill amending the Universal Health Care (UHC) Act to lower the Philippine Health Insurance Corporation’s (PhilHealth) premium rate from 5% to 3.5% on Tuesday, January 28.

House Bill 1371 seeks to introduce a provision in Section 10 of Republic Act 11223, or the UHC Act, that would set the new initial premium rate at 3.5%, based on actuarially adjusted rates.

Actuarial adjustments involve calculating financial risks in the insurance sector, factoring in projected healthcare utilization and cost trends. 

Under the proposed measure, an independent body would be required to review PhilHealth’s annual actuarial report to determine necessary premium rate adjustments, which must then be approved by Congress.

PhilHealth has faced scrutiny for maintaining a high 5% premium rate despite having an estimated P150 billion in surplus reserve funds. 

Lawmakers have criticized the state insurer, arguing that its benefit package expansions have been long overdue and appear to merely account for inflation, given the rising cost of hospital fees.

While the UHC Act already mandates that premium increases should fund expanded benefits, lawmakers are seeking to amend this provision to explicitly require that “any unused portion of the premium subsidy of indirect contributors shall be used exclusively for the increase in benefits.”

The existing law also mandates that any excess in PhilHealth’s reserve fund be used to enhance program benefits and reduce members’ contributions. 

However, the proposed amendment specifically directs the Department of Health (DOH) and PhilHealth to establish a mechanism in the law’s implementing rules and regulations (IRR) to facilitate the reduction of premium contribution rates.

To prevent the misallocation of PhilHealth funds, the bill states that “no portion of the reserve fund or any fund or income of PhilHealth … shall accrue to the general fund of the national government” or any other government-owned or controlled corporation (GOCC). 

This provision comes in response to concerns over the transfer of P89.9 billion in unutilized PhilHealth funds to the National Treasury. 

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