As the Philippines grapples with increasing healthcare costs, the government is gearing up to conduct a morbidity study aimed at determining reasonable premium rates for insurance companies.

The Insurance Commission (IC) and the Actuarial Society of the Philippines (ASP) have joined forces to undertake the nation's first industry-wide morbidity study, utilizing the claims experience of health maintenance organizations (HMOs) and insurance companies.

The IC has stated that the study aims to establish benchmarks for evaluating the fairness of premium rates, reserve valuations, and capitalization requirements of HMOs and insurance companies.

“The study will not only promote a sound health insurance and HMO market, but also encourage product innovation and attract foreign investments,” the IC said.

“Ultimately, the study aims to bridge the health protection gap among Filipinos and enhance financial inclusion,” he added.

In the Philippines, the estimated protection gap amounted to P24 trillion, equating to P1.17 million per household.

Apart from the issue of cost, the lack of sufficient financial education and limited access to insurance services are significant challenges that hinder Filipinos from attaining complete financial protection and security.

Meanwhile, the country’s insurance penetration rate in the first quarter of 2023 dropped to 1.75 percent of the country’s gross domestic product, down from nearly two percent in 2022. 

This falls below the rates of its ASEAN neighbors, such as Thailand, with a penetration rate of five percent, and Indonesia, at 2.72 percent as of 2022.