House Ways and Means chairman Albay Rep. Joey Salceda has filed a bill in Congress that seeks to overhaul the main segments of PhilHealth's operations to “fully fund universal health care and root out corruption and mismanagement in the agency PhilHealth.”
Under his PhilHealth Reform Act of 2020 (HB No. 7578), Salceda said overseas Filipino workers (OFWs) will no longer have to pay PhilHealth premiums since they do not earn their income in the country and do not use its services.
Once passed into law, the measure will also allow low income earners to save about P4,800 in yearly contributions.
Salceda said the bill incorporates the recommendations contained in a 33-page aide memoire he recently submitted to the House leadership and members of the Inter-Agency Task Force (IATF) on Emerging Infectious Diseases to solve the PhilHealth crisis.
“OFWs will pay no premium contributions, since they do not earn their income in the Philippines, and will not be able to use the services of PhilHealth. Minimum wage earners, on the other hand, will save at P4,800 in premium payments each year because the premium structure will be made more attuned to changes in income,” he said.
Salceda said his proposed reforms are both structural and anti-fraud.
Under his bill, the premium contribution scheme is made more progressive, linking income tax rate with premium contribution.
Minimum wage earners who are exempt from income taxes will only pay P100 minimum contributions monthly, down from around P250-500 per month under the current system.
“We are tying the premium contribution to income and are ending the income ceiling system. Under the old scheme, the more you earn above the ceiling, the less you pay as a share of income. This is not progressive. We are improving the system by linking premium with income. We will also help stamp out income reporting fraud since tax returns can be the basis of premium charges,” Salceda said.
The bill also reforms the PhilHealth governance structure and makes the Secretary of Finance as its Board Chairman, since PhilHealth is an insurance and investment agency, thus a financial company.
“We need the same management caliber of that in the Government Service Insurance System for PhilHealth. In the US, their Center for Medicare and Medicaid services is chaired by the Secretary of Treasury. That is a model that is more consistent with the character of insurance management,” he said.
HB 7578 also seeks to reform PhilHealth’s reserve fund management, making the Bureau of Treasury as fund manager of its investment reserve fund, accumulating net income into the reserve fund, and removing the two-year ceiling in fund life to ensure that the health insurance system can withstand demand shocks such as pandemics.
“Under this bill, PhilHealth will no longer be at risk of 'going bankrupt' as they claimed it would be during the Congressional hearings on their finances,” Salceda said.
To prevent fraud in the reporting of cases, Salceda’s bill also mandates the creation of the national health database of all claims and benefits requested from and granted by PhilHealth which will also follow the one-patient, one-record principle.
The bill likewise requires an independent audit of PhilHealth, apart from those conducted by the Commission on Audit, and mandates the PhilHealth president to report to the President of the Philippines and to Congress measures taken to address adverse audit findings.
