EMPLOYER ACTION CODE: ACT
Republic Act (RA) No. 11223 (on instituting universal health care for all Filipinos, prescribing reforms in the health care system and appropriating funds therefore), known as the Universal Health Care (UHC) Act, is aimed at guaranteeing a uniform standard of health care services at an affordable cost. The act also comes with a substantial price tag for employers and the state, estimated at PHP 257 billion for initial implementation, according to the Department of Health (DoH).
Significant provisions of the law (effective March 8, 2019) include:
- All Filipino citizens will be automatically enrolled into an “essential health benefit package” under the existing National Health Insurance Program (NHIP), without regard to the individual’s contribution record with the NHIP.
- NHIP membership will be simplified into two groups: (1) direct contributors (those who are gainfully employed or self-employed with the capacity to pay health care payroll contributions, and lifetime members — i.e., retirees receiving a social security pension — and their dependents); and (2) indirect contributors (all others who are not direct contributors).
- The essential health benefit package includes (but is not limited to) primary care services, medicines, diagnostic and laboratory services, as well as preventive, curative and rehabilitative care. The system will also provide mental health, dental care and emergency services. A comprehensive outpatient benefit package including prescriptions and emergency medical services is due to be implemented and rolled out within two years of the effective date of the act.
- The DoH is expected to establish city- and province-wide health care systems based on primary care provider network services. The Philippine Health Insurance Corporation (PhilHealth), which contracts for services for NHIP, will be responsible for contracting with public, private or mixed service provider networks, financing of service primarily via pre-payment mechanisms including public and private health insurance (PHI), and HMO plans. Patients are required to select a primary care physician (public or private) to act as gateke eper and coordinator of services.
- The total NHIP contribution rate remains at 2.75% of covered pay in 2019 (divided equally between employer and employee), but on monthly wages up to PHP 50,000 (PHP 40,000 previously). From 2020, the contribution rate will increase by 0.50% per year until it reaches 5.00% in 2025. Covered monthly pay will increase by PHP 10,000 each year until it reaches PHP 100,000 by 2024.
- Patients are not subject to cost-sharing mechanisms, such as coinsurance and copayments, for basic services and rooms, but these may apply to additional amenities and services such as private rooms in public hospitals. Additional health benefits (still to be determined) will be provided to direct contributors (who are current in their NHIP contributions).
Full implementation is expected to occur over the next few years, pending publication of the implementing rules and regulations, which are expected to address, among other things, the additional benefits for direct contributors, registry of medical and health-related professionals, the establishment of special health funds to pool and manage financial resources (at the city or provincial level), and the development of supplemental benefit options for members. About 98% of the population is already covered by NHIP, but the provision, availability and uniformity of services is fairly uneven nationwide. As a result, the use of PHI and private providers is common; virtually all companies surveyed by Willis Towers Watson (99%) provide some form of supplemental health care benefits. The attractiveness of PHI as an employee benefit is not expected to be diminished by the advent of the new system, but the creation of the essential health benefit package and local health care networks should accelerate the market’s development for providers and insurers.