PhilHealth not going bankrupt, reserve funds at P128B

Philippine Health Insurance Corporation (PhilHealth) members need not panic over a recent news report that the government corporation will go bankrupt in less than a year.

PhilHealth President and CEO Alexander Padilla said that the government corporation has enough funds to cover benefit payments for its 93 million members.

President and CEO Alexander Padilla (Image Credit: PhilHealth @teamphilhealth)

CNN Philippines quoted Padilla as saying that benefit payments for PhilHealth members have increased from  P34 billion in 2011 to P97 billion in 2015. At the same time, PhilHealth's reserve funds "have been growing steadily too, from about P112 billion in 2012 to P128 billion in 2015."

A news report by Philippine News Agency-Legazpi Bureau caused some members to worry over the soundness of PhilHealth's finances.

The report included PhilHealth board member Eddie Dorotan's statement that the corporation lost almost a billion in 2015.  He said PhilHealth paid out 97 billion while its earnings and collections only amounted to 96 billion. The report also said that the corporation might only last 10 months because fund payout is getting larger than earnings and contributions.

Dorotan reportedly cited that a big portion of funds in the past two to three years went to the 5 million indigents enrolled in PhilHealth.

Padilla confirmed Dorotan's claim that PhilHealth paid out P97 billion in benefits in 2015.  But he also said that aside from the 96 billion collection in premium contributions, PhilHealth earned P7 billion from investment income. Meaning, PhilHealth still earned P6 billion last year.

Meanwhile, Dorotan said that he was misquoted in the report. In an article on Rappler, Dorotan said he mentioned the P1 billion difference in collection and payout,  but underlined the need to intensify collection efforts from PhilHealth members in private and government offices.

PhilHealth members can now sleep soundly with Padilla's assurance that there really is no cause for concern. The reserve funds of PhilHealth is increasing by the year, not decreasing.  With that in mind, it can amply cover benefit payments for its members. Even if PhilHealth loses P1B a year, it will take 128 years to deplete its current reserve funds.
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