By Chloe Mari A. Hufana, Reporter

A PHILIPPINE Supreme Court (SC) associate justice on Tuesday called for a major overhaul of the Philippine Health Insurance Corp. (PhilHealth), including changes to its board, over its failure to fully implement mandated benefits for members.

During a court hearing on lawsuits questioning the transfer of P89.9 billion in the agency’s funds to the national Treasury, Justice Antonio T. Kho, Jr. called out the government for PhilHealth’s shortcomings, saying the burden should not fall on shortchanged members.

He also urged PhilHealth to ask President Ferdinand R. Marcos, Jr. to return the P60 billion in PhilHealth funds that were transferred to the national Treasury as unprogrammed funds, arguing that the funds should instead be used to expand benefits, improve services, and hire additional personnel to address the country’s healthcare needs.

“Probably, it’s time to overhaul PhilHealth and change the board for not complying with what the law requires,” he told Health spokesman Albert Francis E. Domingo during the third oral arguments at the Supreme Court building in Manila.

“It’s not a person’s fault for not availing [himself] all of these benefits,” Mr. Kho told the hearing. “Apparently, in your own words, it’s the fault of the administration, the last administration, or the previous administration, and it’s the fault of the PhilHealth board. Let’s not make people suffer because the money is there,” he added in mixed English and Filipino.

“The government will not give it to PhilHealth to serve as health benefits for our people.”

Mr. Domingo explained to the full court the process of how PhilHealth computes its request for a yearly budget.

Mr. Kho scolded PhilHealth and Health officials for disregarding the law when it comes to its budget requests for subsidy.

“When you come up with your budget request for the subsidy, you don’t actually consider the taxes being collected that Congress passed for purposes of subsidy for indirect contributors,” Mr. Kho said.

Mr. Domingo said the observation was correct, adding that they compute the yearly subsidy “based on the need.”

“Budget principles require that it is needs-based,” he told the hearing. “If we follow based on the projected fund ceiling or availability, it might not match.”

Mr. Kho said the PhilHealth budget should be based on needs, but cited its failure to address the health needs of Filipinos.

“The problem there is PhilHealth limits the funding so that you don’t address the health needs of the Filipino people,” he said. “You define your own limits. Congress allocates the budget, provides for the collection of taxes and answers for the subsidy of PhilHealth for indirect contributions.”

He also asked why the Department of Health failed to consider the tax collections made by the Bureau of Internal Revenue (BIR) when preparing its subsidy request.

“Mathematically, it’s the premium rate,” Mr. Domingo said in reply. “The way that the premium rate is determined unfortunately is not actuarially fair.”

“It is not based on the spread of benefits that is due to the Filipino people. PhilHealth is really not paying enough, just 10% in 2024. That’s why it should be increased. And mathematically, the only way to do this is to increase the benefit packages, which we are doing now,” he added.

He also agreed with Mr. Kho’s observation that the Health department defines its own limits, adding this is the reason why “this particular case under litigation has been the signal it has been using to increase the benefits [of members].”

Mr. Kho then sought the return of the P60 billion from the government to PhilHealth. The insurer was supposed to transfer P29.9 billion more to the state before the tribunal stopped it from doing so in October.

“If the current administration recognizes that, thank you very much,” the magistrate said. “Therefore, they should restore it and bring the money back to PhilHealth.”

Under the law, a portion of the revenue from excise taxes on tobacco and alcohol products is used to fund the state health insurer.

These funds help expand PhilHealth coverage, particularly for indigent and poor Filipinos, ensuring their access to essential health services.

In 2024, the government initiated the transfer of P89.9 billion from PhilHealth to the national Treasury, labeling these as “excess funds.” The money was supposed to fund various projects including infrastructure and social services.

The transfer faced legal challenges, with the plaintiffs arguing that PhilHealth’s funds, taken from member contributions and specific taxes, should be exclusively used for health-related purposes, as mandated by the Universal Health Care Act.