PhilHealth refers to the Philippine Health Insurance Corporation, which administers the National Health Insurance Program in the Philippines.
It is a tax-exempt government corporation attached to the Department of Health for policy coordination and guidance. Republic Act No. 7875, known as the “National Health Insurance Act of 1995,” established PhilHealth, and this act has been amended by Republic Act No. 10606, known as the “National Health Insurance Act of 2013”.
The guiding principle of the National Health Insurance Program is to adopt an integrated and comprehensive approach to health development, making essential health services available to all Filipinos at an affordable cost, with priority for the underprivileged.
It is also the policy of the State to provide free medical care to paupers. The program aims to provide all citizens with financial access to health services. It serves as a means for the healthy to help pay for the care of the sick and for those who can afford medical care to subsidize those who cannot.
Key features and aspects of PhilHealth:
- Mandatory Coverage: All citizens of the Philippines are required to enroll in the National Health Insurance Program. The implementation is compulsory nationwide.
- Members: A member is any person whose premiums have been regularly paid to the Program and can be a paying member, a sponsored member (whose contribution is paid by another), or a lifetime member.
- Benefits: Members and their dependents are entitled to minimum personal health services, including inpatient hospital care, outpatient care, emergency and transfer services, and other cost-effective services determined by the Corporation and the DOH. These benefits are reviewed annually. Retirees and pensioners of the SSS and GSIS prior to the effectivity of RA 7875 need not pay monthly contributions to be entitled to benefits.
- Health Insurance ID: PhilHealth issues a health insurance ID with a corresponding ID number for identification, eligibility verification, and utilization recording. The absence of an ID card shall not prejudice the right of any member to avail of benefits. The ID is recognized as a valid government identification.
- Portability of Benefits: PhilHealth is mandated to develop mechanisms to ensure that benefits are portable across different Local Health Insurance Offices.
- PhilHealth Corporation: The Corporation has various powers and functions, including:
- Supervising the provision of health benefits and setting standards for quality of care.
- Negotiating and entering into contracts with health care providers.
- Inspecting facilities and records of health care providers and employers.
- Establishing and maintaining an electronic database of members.
- Conducting information campaigns.
- Conducting post-audits on the quality of services.
- Imposing interest and surcharges for delays in premium remittances.
- Supporting the use of technology in health care delivery.
- Mandating national agencies and LGUs to require proof of PhilHealth membership before doing business.
- National Health Insurance Fund: A fund is created consisting of contributions from members, government appropriations, and balances from the Health Insurance Funds of the SSS and GSIS. A portion of accumulated revenues is set aside as reserve funds.
- Health Care Providers: Beneficiaries can choose from accredited health care providers. The Corporation has the authority to grant accreditation.
- Payment Mechanisms: PhilHealth may use various provider payment mechanisms, including fee-for-service, capitation, case-based payment, global budget, and others.
- Grievances and Appeals: The law outlines provisions for grievances and appeals.
- Penal Provisions: Violations of the Act by accredited health care providers can result in fines or suspension/revocation of accreditation.
- Relationship with SSS and GSIS: The Health Insurance Funds of the SSS and GSIS were to be transferred to PhilHealth. Initially, SSS and GSIS continued to perform Medicare functions under contract with PhilHealth. Retirees and pensioners of SSS and GSIS may be lifetime members. The Portability Law (RA 7699) allows for the crediting of service or contributions in both GSIS and SSS for retirement benefits of employees who have worked in both sectors.
- PhilHealth and Employment:
- Employees of PhilHealth have the right to self-organize and form unions to pursue better terms and conditions of employment that are not fixed by law. However, they cannot demand for better terms if these are fixed by law, and their salaries are standardized by Congress.
- PhilHealth benefits are considered a type of employee benefit.
- Domestic workers are entitled to PhilHealth coverage.
- Proof of PhilHealth premium contributions may be required for the issuance or renewal of professional or business licenses or permits.
Current Issues with PhilHealth
Recent news concerning the Philippine Health Insurance Corp. (PhilHealth) revolves around several key issues, primarily the controversial transfer of PHP89.9 billion in excess funds to the national treasury and the ongoing legal challenge at the Supreme Court (SC).
Supreme Court Oral Arguments and Legal Challenges:
- The SC has been hearing oral arguments on the constitutionality of a provision in the 2024 General Appropriations Act (GAA) and a Department of Finance circular that mandated the PhilHealth fund transfer.
- Supreme Court Associate Justice Alfredo Benjamin Caguioa questioned Congress’s discretion in determining PhilHealth’s budget allocation, arguing that it undermines the mandates of sin tax laws and the Universal Health Care Act (UHA), which earmark funds for PhilHealth. He emphasized that four sin tax laws explicitly allocate revenues for the UHA, and their character as earmarked funds should remain even if they pass through the GAA.
- Caguioa also criticized the insertion of a provision in the 2024 GAA during the bicameral conference committee that allows the use of unprogrammed appropriations by returning excess reserve funds of government-owned and -controlled corporations (GOCCs) to the national treasury. He believes this single-sentence insertion could undo years of work to establish PhilHealth’s funding and sustainability under the UHA.
- Finance Secretary Ralph Recto defended the transfer, stating it is a “common-sense approach” to avoid borrowing funds and manage the national debt, which significantly increased due to the pandemic. He argued that these were “idle and unused” funds and that putting every peso to work is a duty to the Filipino people. Recto likened the move to a “Bayanihan 3,” funded by existing resources rather than new taxes, to aid economic recovery.
- The petitions challenging the fund transfer were filed by various groups, including 1Sambayan Coalition, Sen. Aquilino Pimentel et al., and Bayan Muna chair Neri Colmenares et al..
- The SC concluded the oral arguments and required the parties to submit their memoranda within 30 days. A temporary restraining order is currently in place, halting the transfer of the remaining PHP29.9 billion.
President Marcos’ Assurances and PhilHealth Benefits:
- President Ferdinand R. Marcos Jr. assured the public that PhilHealth has sufficient funds to continue delivering services and is even enhancing benefit packages. He stated that instead of a decrease, PhilHealth’s services and insurance payments have increased.
- In January 2025, PhilHealth stated its funds were sufficient to support additional and expanded benefits despite having zero government subsidy for the fiscal year 2025.
- PhilHealth announced plans to raise its coverage of hospital costs to 18 percent by 2025 and 28 percent by 2028.
- New and expanded health benefit packages were launched in January 2025, including coverage for ischemic heart disease, peritoneal dialysis, kidney transplantation, preventive oral health services, outpatient emergency care, and a 50-percent increase in case rates.
- The Outpatient Emergency Care Benefit (OECB) Package has been fully implemented starting February 14, 2025, allowing all PhilHealth members and their dependents to avail of emergency care at accredited hospitals without requiring confinement. Hospitals do not need additional accreditation for this benefit. Patients admitted during the rollout who couldn’t avail of OECB initially may file for reimbursement.
Concerns about PhilHealth Coverage and Management:
- Supreme Court Associate Justice Jhosep Lopez shared his personal experience where PhilHealth only covered a small fraction (0.7 percent or P50,000) of his nearly P7 million hospital bill for esophageal cancer. He also noted that PhilHealth couldn’t cover his P40,000 per session dilation procedure despite his long-term contributions. This highlighted the UHA’s goal of minimizing out-of-pocket expenses.
- Healthcare workers and civil society organizations protested outside the Supreme Court, demanding the return of the transferred funds to lower premiums and increase benefits. They argued that PhilHealth’s massive funds have become a “cash cow and source of corruption,” and the government is shifting healthcare responsibility to individual members while benefits remain insufficient.
- The Health Workers Party-List also stated that the fund transfer violates the Universal Health Care Act by using health funds for non-health-related unprogrammed items.
In summary, the key issues surrounding PhilHealth involve a legal battle over the transfer of a significant amount of its funds to the national treasury, with arguments focusing on the constitutionality of the move and its potential impact on the UHA. Simultaneously, President Marcos has assured the public of PhilHealth’s financial stability and ongoing improvements in benefits, including the recent implementation of outpatient emergency care coverage. However, concerns remain regarding the adequacy of PhilHealth’s coverage for serious illnesses and the potential for misuse of its funds.
What the Constitution Prohibits
The Constitution prohibits the transfer of appropriations unless specifically authorized by law and under certain conditions.
A valid transfer requires: (1) A law authorizing the transfer; (2) The funds to be transferred are savings from the transferring agency’s appropriations; (3) The purpose of the transfer is to augment (increase) an existing item in the receiving agency’s appropriations.
Cross-border augmentations (transfers between different branches or constitutional bodies) are generally prohibited.
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