The Premium to Income Ratio is born  for the purpose of this discussion. It is computed, the peso premium paid divided by income earned. As an example, PhP 1,500 of premium divided by PhP 30,000 is equal to 5%.  For a Low-Middle Income earner with 5% Premium to Income Ratio, it can be interpreted as for every PhP 100 earned, PhP 5 goes to the PhilHealth premium. However, with the income ceiling of PhP 100,000 provided by the UHC, the upper class are paying less in peso premium than what they deserve to be paying. For a top-level executive in PhilHealth who is earning PhP 120,000 per month, for every PhP 100 earned, his/her premium is only Php 4 because the Premium to Income Ratio is about 4% in the Upper-Middle Income. Plus the glaring truth, the Rich people earning PhP 1M per month are only required to pay 0.50 cents for every PhP 100 of earnings because his/her Premium to Income Ratio is 0.50%. To illustrate, Chart 1 showcases the downtrend of the ratio when premiums are started to be collected from the upper class.

Overseas Filipinos Are Artificially  Rich

            Moreover, Overseas Filipinos such as Registered Nurses could get a gross income of PhP 120,000 per month and above in their destination countries like the United Kingdom, Germany, New Zealand, and the United States.

 In the income class classification of the Philippines, they may easily be artificially categorized to Upper-Income or Rich level when foreign currency earned is converted to Philippine Pesos. Consequently, their Peso premium obligation is now higher than their original payments way back when they were working in the Philippines. The Universal Health Care Act does not take into account the living expenses adjustments for the Overseas Filipinos. They may be earning an equivalent of PhP 120,000 and above in a foreign country but their income class category in their destination countries is not Upper Income or Rich Level. The Overseas Filipinos have to adjust their lifestyle to pay for living expenses and expensive obligations like insurance and taxes to their destination countries. With all financial obligations deducted, they may be Middle-Middle Income Class or lower in their destination countries. However, based on the UHC law, they are required to pay like the Upper Income or Rich class in the Philippines because of their new higher gross income.

By common sense, Overseas Filipinos are not equivalent to the PhilHealth C-suite executives or owners of SM, Ayala, and other big businesses in the country. The Overseas Filipinos deserve adjustments from this unfair PhilHealth new premium scheme.

Proposals

Republic Act No. 11223 of 2018 also known as The Universal Healthcare Act, is a great leap forward for delivering health to the hands of all Filipinos. However, the premium payment scheme was structured unfairly for more than 84% of the Filipinos and was made in favor of the upper class.  The two proposals cited below are to help improve fairness in the so-called national social health insurance. 

            Update part of Republic Act No. 11223, Chapter 3, Section 10, that states premiums are subject to a maximum income ceiling of PhP 100,000. Consequently, the upper class is limited to pay only PhP 5,000 per month and is not proportionate to their earned income. While close to 80 percent of Low-Middle to Middle-Middle Income Class Filipinos are paying PhP 5 PhilHealth premium for every PhP 100 earned income, the Upper Class is unfairly paying less than that based on the PhilHealth Premium to Income Ratio analysis.

       In addition, the income class of Overseas Filipinos is artificially bloated when their foreign earned income is converted to Philippine Pesos. Therefore, their Peso premium obligation is now higher than their original payments way back when they were working in the Philippines. Overseas Filipinos may be earning equivalent to the Upper Class in the Philippines. But minus living expenses and hefty obligations like taxes and insurance, they are not living like Upper Class in their destination countries. Instead, they may be Middle-Middle Class or lower. Unfortunately, The Universal Health Care Act does not consider the living expenses adjustments for Overseas Filipinos while they work abroad. It is strongly proposed to add into consideration that PhilHealth premium obligations for Overseas Filipinos be based on a sliding scale depending on what income class they belong to in their destination countries. Ideally, the lower the income class, the lower the premium.

In summary, the PhilHealth premium that is subject to a maximum income ceiling of PhP 100,000 should be removed in the Universal Health Care. This is to ensure that the upper class is paying according to their earned income. The current premium scheme of PhilHealth is designed that about 80 percent of Low-Middle to Middle-Middle Income Class Filipinos is paying more than the Upper Class based on the Premium to Income Ratio analysis. Also, Overseas Filipinos should be given special provisions in the law because their income class is artificially bloated when their earned income is converted to Philippine Pesos. Therefore, they are paying more Peso premium compared to their counterparts in the Philippines. 

Case Management

The corporation is battling with insurance fraud and inefficiency in its operations as evidenced by – PhP 3.4 billion operating income loss (Philippine Health Insurance Corporation, 2019). PhilHealth’s Acting Senior Vice President Neri Santiago stated that the remaining actuarial life of the corporation is only until the year 2027 (Gonzalez, 2021).

An example of a wasteful or fraudulent act, there are certain hospital claims from General Santos City for Covid-19 that are suspicious and appear to be manipulated to get a bigger sum amount for reimbursement (Allen, 2021). PhilHealth is working on getting more lawyers and analysts to investigate and prevent this activity (Philippine Health Insurance Corporation, 2019). However, a robust Case Management system should include Registered Nurses who are experienced in the field and be able to help detect appropriateness of care and suspicious healthcare activities. Unfortunately, there are are no hiring at the PhilHealth career website for Case Managers and Utilization Review Managers. Research has shown that the benefits of a robust Case Management system outweigh the cost. Currently, PhilHealth may need to hire consultants to optimize this program.

 On the other hand, many Filipino nurses working in the Clinical Process Outsourcing (CPO) industry and health insurance abroad are already very familiar with Case Management, especially in the US landscape. PhilHealth must tap its local workforce and may need to compete on their wages to attract the best and the brightest.