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PhilHealth as model in merging SSS and GSIS

It was in the summer of 1972—the year Martial Law was declared —when our Medicare program paid its first benefits almost three years since the enactment into law on August 4, 1969 of the Philippine Medical Care Act of 1969. 

The Social Security System was assigned to administer the program for its members and dependents, while the Government Service Insurance System had to separately administer it to its own.

The program that both Systems implemented was the same, yet for some reasons, the separate implementation by two independent agencies resulted in contrasting quality and standard.    

Notably, the original proponents of the Medicare program envisioned and mandated its extension within three years to all others who were not members of either SSS or GSIS. 

The program steadily expanded nationwide as more and more hospitals were constructed in remote areas in the next 25 years. Its benefits, however, could only afford to support a small part of actual hospital bills. 

Medicare was inadequately financed by a low contribution rate. It could not support increases in benefits that would increase the program’s support value and significantly reduce the out-of-pocket hospital expenses of its beneficiaries.

The program had a contribution rate of only 2.5 percent of monthly pay, which was capped initially at a maximum of P300. Even when this cap was increased later to P1,000, the maximum contribution remained at P25 a month. By 1995, a member could still contribute selectively at P0.60 a month and be entitled to the same uniform set of benefits that was being granted to all.

Moreover, its coverage remained limited to members of both Systems and extended to self-employed persons and their dependents only after SSS included them in its regular program beginning on Jan. 1, 1980. 

SSS officials were opposed to any abrupt extension of the program to the remaining uncovered low-income groups for fear of further worsening the program’s precarious financing. They were anticipating that this would happen once these highly-subsidized groups started outnumbering the subsidizing members.

The consensus by early 1990s was that Medicare’s vision as a universal and meaningful program would not be realized under its present legislative mandate.   

Still, the clamor for extending social health insurance to the rest of the population was loud and unstoppable.

Thus, on Feb.14, 1995, President Fidel Ramos signed into law the National Health Insurance Act of 1995, which consequently repealed the Medicare Act of 1969 and other laws that had amended it. PhilHealth was created and became the sole administrator of the national social health insurance for all Filipinos, including SSS and GSIS members and their dependents. 

Effectively, the SSS and GSIS Medicare programs were merged into a unified and universal PhilHealth. 

GSIS officials apparently welcomed this development and immediately turned over their Medicare operations to PhilHealth officials in October 1997. 

In contrast, SSS officials reluctantly turned over, six months later in April 1998, their more extensive Medicare operations and bigger assets to PhilHealth officials. They anticipated that more would be spent administratively by PhilHealth considering that it would have to put up its own personnel and operating infrastructures. 

Moreover, SSS officials considered unfair that the Medicare funds they had prudently accumulated in the past 25 years would be spent away to subsidize new PhilHealth beneficiaries who have never contributed to SSS before. 

Truly, in the 2011 website dashboard of PhilHealth, which showed for the last time its premium distribution, employees of government and private sectors contributed 84.2 percent of the total premiums. In return, they only received 52.1 percent of the total benefits paid. 

Almost 20 years after its creation, PhilHealth as of Dec. 31, 2015 was providing coverage to 93,445,053 Filipinos. This is 92 percent of the population.  

How did PhilHealth achieve this almost universal coverage? 

Presidents Gloria Macapagal Arroyo and Benigno Aquino III made sure that they personally handpicked as PhilHealth presidents and chief executive officers only those who have unquestionable loyalty to them. They then supported­—through the national budget—the financial requirements of extending the program to the vast non-paying indigents and barely-paying overseas Filipino workers.

For instance, PNoy didn’t hesitate in realigning from the 2016 General Appropriations Act P43.83 billion to subsidize the PhilHealth premiums of indigent families and senior citizens. In contrast, not a single centavo ever came from general revenues for the coverage of any Medicare member and his dependents.

Keen observers say, however, that they did it for political considerations, and made their support more pronounced during election years when they actively used PhilHealth to pursue their political agenda.

For instance, while campaigning for her election in 2004, PGMA widely distributed PhilHealth cards that carried her photo. In a presidential debate last election, PhilHealth immediately came out publicly to prove the point of PNoy’s anointed candidate against then Mayor Digong Duterte. 

Sooner or later, we’d pop out the inevitable question—was the merger of the SSS and GSIS Medicare programs into a unified and universal PhilHealth good?

If so, why don’t we use it as our model in merging the pension systems of SSS and GSIS?

Topics: Horace Templo , Martial Law , Philippine Medical Care Act of 1969 , PhilHealth , Social Security System , SSS , Government Service Insurance System , GSIS
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