Salceda’s bill to overhaul PhilHealth and root out corruption in the agency

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House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) has recently 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 7578), Salceda said Overseas Filipino Workers (OFWs) will no longer have to pay PhilHealth premiums since they don’t earn their income in the country and do not use its services, and and low income earners will save about P4,800 in yearly contributions.

The lawmaker 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 explained.

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.

“Everyone pays PhilHealth premiums anyway, with excise taxes on alcohol, tobacco, and e-cigarettes,” he noted, adding that his 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, and 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,” the lawmaker-economist said. He noted that Government-Owned and Controlled Corporations (GOCCs), under the Secretary of Finance also seem to be better governed than other GOCCs.”

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.

“These recommendations are consistent with the findings of both the Senate and House investigations, as well as our own study of PhilHealth’s finances and governance,” Salceda said, adding that his reforms will be even more effective once his Electronic Health and Telemedicine Development Act is passed.

“To develop the infrastructure necessary for these databases, and to strengthen our primary care system, we also have proposed House Bill No. 7422 or the Philippine E-Health and Telemedicine Development Act of 2020,” Salceda wrote in his explanatory note.

“This would extend primary care to the remotest regions (preventing the higher costs of overspecialized care), and, if used to develop a national health database, would help prevent cases of fraud. Those who intend to organize fraud, whether inside or outside PhilHealth, will need to connive with more people in an easily verifiable system, where anomalies can be easily detected through data analytics. If ever fraud happens in the telehealth system, we can more easily catch them,” he said.

Salceda has also called for the passage of his proposed Cheaper Medicines For All Act, (HB 6219) which further enhances the existing Cheaper Medicines Law It seeks to include medical supplies and medically necessary assistive equipment such as prosthetics in the coverage.

“Telemedicine Act and the Cheaper Medicines for All Act would also keep our health system costs low. They are complementary bills to PhilHealth reform. We need them just as much,” Salceda said.

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