Mercado ponders cure for ailing PhilHealth
Credit to Author: Alexis Romero| Date: Thu, 6 Feb 2025 00:00:00 +0800
MANILA, Philippines — Likening the state-run health insurer to a sick patient, the newly appointed chief of the Philippine Health Insurance Corp. (PhilHealth) yesterday vowed to address issues related to benefits management and financial reporting to enhance its delivery of services.
PhilHealth president and chief executive officer Edwin Mercado said he would study thoroughly what processes need to be amended to comply with President Marcos’ directive to expand the health insurer’s benefits.
“As a doctor, I view PhilHealth as a patient with illness and I am determining the cure,” Mercado said in a press briefing at Malacañang.
Mercado acknowledged that he is facing a “huge challenge” as PhilHealth chief, but gave assurance that he is used to dealing with patients’ concerns.
“I experienced being on the other side of the fence, how it is to be dealing with PhilHealth,” said Mercado, a hospital executive and orthopedic surgeon.
Mercado is planning to look into the efficiency of PhilHealth’s operations, saying there are leaks and wastage that can be plugged.
He cited the need to standardize the recording of financial reports to ensure transparency and to digitize the processing of claims.
“Efficiency is tied with whatever we can gain from addressing wastage. We will use that to expand the benefits,” the PhilHealth chief said. “Once we implement the digitization, we can flag the claims that are excessive or questionable.”
At the same press briefing, Mercado said PhilHealth would comply with whatever ruling the Supreme Court would issue on the petitions questioning the transfer of the state insurer’s more than P89-billion “excess funds” to the national treasury.
“We respect the process that the Supreme Court is undergoing and we will abide by whatever ruling the Supreme Court will have,” he said.
Mercado, who took his oath last Tuesday, replaced Emmanuel Ledesma Jr., whose stint was rocked with criticisms over alleged inefficient fund use and the state insurer’s zero subsidy in this year’s national budget.
The Government Corporate Counsel and the Solicitor General have defended the legality of PhilHealth’s transfer of its excess funds, arguing before the Supreme Court that the move complies with existing laws and does not violate the constitutional right to health.
During oral arguments on Tuesday, Government Corporate Counsel Solomon Hermosura said PhilHealth’s remittance of its fund balance to the National Treasury, in compliance with Department of Finance (DOF) Circular 003-2024, is lawful.
“It is lawful because, contrary to the claims of petitioners, the fund balance is not part of PhilHealth’s reserve fund. And the funds of PhilHealth, including that part sourced from sin taxes, are not a special fund under the Constitution,” he said.
According to the DOF, special provision 1(d) of the 2024 General Appropriations Act (GAA) authorizes the utilization of government-owned and controlled corporations (GOCC) fund balances to finance key national programs under Unprogrammed Appropriations.
Dismissing claims that the transfer undermines health care funding, Hermosura said that PhilHealth’s budget has actually increased to P284 billion in 2025 compared to three years ago, despite remitting P60 billion last year.
“Thus, we submit that there is no violation of the people’s constitutional right to health when PhilHealth adheres to fiscal responsibility and submits to the authority of the President and the Secretary of Finance to respond to the imperatives of the national interest while carrying its mandate to advance health care,” he said.
Solicitor General Menardo Guevarra also defended the legality and necessity of special provision 1(d) of the GAA and the DOF circular implementing it. He described the measure as a temporary but practical approach to financing critical government programs while staying within legal boundaries.
“The money needed to provide essential services is not easily obtained in our part of the world. But as they say, scarcity breeds creativity – often, practical solutions arise from something as simple as common sense,” Guevarra said.
He argued that the government would be acting irresponsibly if it allowed key programs to stall due to funding shortages while surplus funds remained untapped elsewhere.
Guevarra also rejected claims that the finance secretary overstepped presidential authority, saying that the fund transfer did not involve savings, as defined under the GAA, and therefore did not constitute an illegal reallocation of appropriations.
Dismissing concerns of wrongdoing, the solicitor general assured both the high court and the public that there was no hidden agenda behind PhilHealth’s remittance of excess funds to the National Treasury.
The SC is set to resume oral arguments on Feb. 25 as it deliberates on the legality of transferring GOCC’s excess funds to the National Treasury.
OFW party-list Rep. Marissa Magsino yesterday lauded Congress’ approval on third and final reading of a bill exempting OFWs from premium contribution in their health insurance.
Magsino, one of the authors of House Bill 11357, hailed the decision of the lawmakers to free these migrant workers from paying monthly premium contributions to PhilHealth.
“Removing this financial burden on our OFWs is equitable and justified by the unique nature of their overseas employment. Our OFWs comprise a significant segment of Philippine labor force and accounts for about 10 percent of the gross domestic product of the country in a year,” she said.
As it now stands, HB 11357, which was approved Monday night, provides that 50 percent of OFWs’ PhilHealth premium contributions will be “shouldered by the national government and the other 50 percent will be shared by their employers.”
Through 191 votes, House members approved early this week on third and final reading the proposed measure reducing from five percent to 3.5 percent the premium contribution for members of PhilHealth. – Keisha Ta-asan, Daphne Galvez, Delon Porcalla