Economic advocacy group Action for Economic Reforms (AER) backs the Department of Finance’s (DOF) stance to retain Philippine Health Insurance Corp.’s (Philhealth) five-percent premium rate, warning that any reduction would have catastrophic consequences for the country’s health financing system.

If the proposed amendments were to pass, AER believes this would prompt a “potential crisis” in the country’s health system. Thus, a call to defer the passage of such changes.

AER has appealed to the Senate panel of the bicameral conference committee to defer the passage of proposed amendments to the Universal Health Care (UHC) Law, which was enacted in 2019 and is currently under congressional review.

With the “grave” concern also being raised by the DOF, the group, in a statement released on Monday, June 2, expressed support to the position of the Finance department “to retain the current PhilHealth premium rates and improve the benefit packages.”

One of the major changes that is deemed to have “catastrophic consequences” is the proposal to slash the state-run health insurer’s premium rates to 3.5 percent by next year from the current five percent.

The group noted that this comes amid expansion and improvement of PhilHealth benefits that will “require increased and sustainable financing.”

“The proposed reductions in premiums, alongside a zero-budget allocation for PhilHealth in 2025 and the ₱60-billion funds transferred to the national treasury, raise serious concerns about PhilHealth’s financial capacity, which could jeopardize the sustainability of benefit delivery,” AER said.

As cited by the group, the DOF sees the rate reduction undermining the funding of the expansion of benefits that the Marcos administration and PhilHealth have promised.

“A decline in PhilHealth funds due to the decreased premium will result in a failure to reduce the out-of-pocket health expenses, especially of the lower-income class,” AER argued.

AER said Congress’ push to lower PhilHealth premiums assumes the agency has excess funds, but Supreme Court (SC) arguments revealed its liabilities exceed its reserves.

AER also flagged other contentious amendments beyond premium adjustments, including provisions on health technology assessment, competition in service delivery, health information, and governance.

It said that the call to defer the amendments also recognizes that PhilHealth’s new leadership is currently reviewing policies to strengthen reform efforts, while the pending SC ruling on the fund transfer is expected to significantly influence the interpretation of the UHC Law.

AER maintains that it would be more prudent for Congress to pause the amendments, await the SC ruling, and thoroughly assess the UHC Law “rather than rush to legislate questionable provisions.”