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.
The Supreme Court has since issued a temporary restraining order (TRO) on the final tranche of P29.9 billion following three petitions questioning the constitutionality of the fund transfer.
RELATED: Petition No. 3 challenges P89.9-B PhilHealth fund transfer
The bill also seeks to adjust the premium contribution scheme for overseas Filipino workers (OFWs) and migrant workers. Under the proposal, the government would shoulder 50% of their PhilHealth premium contributions. For seafarers and land-based migrant workers, their employers would cover half of the required contributions.
However, Rep. Arlene Brosas (Gabriela Women’s Party-list) challenged this provision, arguing that OFWs already have insurance coverage in their host countries and are unlikely to benefit from PhilHealth.
She pointed out that the provision primarily benefits their dependents in the Philippines, which she said imposes a “double burden” on OFWs, as they would be required to pay two separate insurance contributions.
Health Committee Chairperson Rep. Ciriaco Gato Jr. (Batanes, Lone District) explained this is primarily for the OFWs’ dependents who are in need of health insurance.
PhilHealth was not granted any government subsidy for fiscal year 2025. They will operate on a P284-billion corporate budget, which is primarily sourced from direct contributions, and excess reserve funds.
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