The Philippine Health Insurance Corp. (PhilHealth) remains financially stable and fully capable of fulfilling its mandate, its counsel told the Supreme Court (SC) during oral arguments on Tuesday, February 25, regarding the transfer of its idle funds to the national treasury.
Government Corporate Counsel Solomon Hermosura reassured the justices that concerns over PhilHealth’s financial status are unfounded. He clarified that the reported P1.150 trillion in liabilities is not actual debt but a provision for future obligations based on actuarial estimates.
“PhilHealth appears to have more liabilities than assets because of its provision for insurance contract liabilities, which stood at P1.150 trillion as of December 31, 2023. This is merely a provision, not an actual liability,” Hermosura explained.
He emphasized that since PhilHealth has no current claims under these provisions, the figures do not indicate financial distress. He cited the Financial Rehabilitation and Insolvency Act of 2010, which defines liabilities as monetary claims against a debtor, and noted that PhilHealth has no such outstanding claims.
Hermosura also highlighted that PhilHealth operates differently from private insurers, stating, “PhilHealth has not issued and has no outstanding insurance contracts. It is a state insurance company, not a private one.”
Furthermore, he pointed out that under Section 58 of the National Health Insurance Act, the government guarantees the financial viability of PhilHealth’s programs, making insolvency an unlikely scenario.
The transfer of P89.9 billion in unused PhilHealth funds to the national treasury has drawn criticism from various health reform groups, who argue that these funds should remain within PhilHealth.
During the oral arguments, Justice Amy Lazaro-Javier questioned the urgency of reallocating these funds for government programs that are already financed.
Budget cut challenged
With no government subsidy allocated to the state health insurer this year, health reform advocate Tony Leachon has filed a petition before the Supreme Court (SC) to halt the implementation of the national budget.
In a petition for certiorari and prohibition filed yesterday, Leachon questioned the constitutionality of the decision to exclude funding for the Philippine Health Insurance Corp. (PhilHealth). He argued that the lack of subsidy violates Filipinos’ constitutional right to health and the Universal Health Care Law.
Leachon pointed out that PhilHealth’s funding should come from member contributions, the Department of Health’s annual appropriations, and government subsidies.
He also cited the Sin Tax Reform Act of 2012, which mandates that 80 percent of the incremental revenue from sin taxes be allocated to universal health care.
If PhilHealth is forced to rely on excess funds for operations, he warned that it could strain plans for expanded benefits and improved services, including reduced out-of-pocket expenses for members.
Leachon also referred to SC Associate Justice Amy Lazaro-Javier’s statement on February 4, which described PhilHealth as being financially distressed.
In addition to halting the budget, Leachon requested a writ of mandamus directing state agencies to allocate and release funds to PhilHealth. He criticized the realignments and budget increases for the House and Senate, arguing that these changes were done arbitrarily and lacked transparency.
The budget for the House of Representatives increased from P16.35 billion to P33.67 billion, while the Senate’s budget rose from P12.83 billion to P13.93 billion.
Among the respondents named in the petition were Speaker Martin Romualdez, Senate President Francis Escudero, and Executive Secretary Lucas Bersamin.
Calls to return budget
Meanwhile, a group of health advocates has urged the Supreme Court to order the return of P60 billion in PhilHealth funds that were transferred to the national treasury to finance unprogrammed appropriations in the national budget.
Sin Tax Coalition convenor Maricar Limpin expressed gratitude for the temporary restraining order (TRO) issued by the SC, which blocked the transfer of the final P29.9-billion tranche of PhilHealth funds. However, she raised concerns about the potential risks of not returning the previously transferred P60 billion.
The group made its appeal during oral arguments on the consolidated petitions challenging the constitutionality of the PhilHealth fund transfer.
Expanded PhilHealth Benefits for Heart Surgeries
Amid ongoing budget concerns, PhilHealth has approved an enhanced benefits package for open-heart surgeries, expanding coverage for procedures such as:
- Coronary Artery Bypass Graft (CABG)
- Ventricular Septal Defect (VSD) Closure
- Tetralogy of Fallot (TOF) Total Correction
The coverage rates for these procedures include:
- P660,000 for a standard-risk CABG
- P960,000 for an expanded-risk CABG
- P614,000 each for VSD closure and TOF correction
These expanded benefits aim to improve affordable access to life-saving surgeries for PhilHealth members.
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