PhilHealth ensures stability amid surging healthcare costs

Insurer did not receive government subsidy for 2025

PhilHealth ensures stability amid surging healthcare costs

Life & Health

By Roxanne Libatique

PhilHealth, the national health insurance agency of the Philippines, remains financially sound despite receiving no government subsidy for 2025, according to its president and CEO Emmanuel Ledesma Jr.

Ledesma addressed the issue during a Senate hearing, assuring the public and legislators that the agency can meet its obligations without disruptions.

PhilHealth remains financially sound in 2025

Ledesma explained that PhilHealth continues to operate effectively despite challenges in 2024, including directives to return a portion of its funds and the lack of a subsidy allocation for 2025.

“At the outset, we declare categorically that PhilHealth is currently in good financial standing, and our commitment to universal health coverage is as steadfast as ever,” he said, as reported by Inquirer.

He explained that the agency’s finances are sourced from member contributions, government support, and other revenues, with reserve funds supported by sound investment strategies and careful financial management.

Potential impact of lack of government funding

Senator Bong Go, who chaired the hearing, questioned how the lack of government funding might impact PhilHealth members and their benefits.

In response, Ledesma offered assurances that all benefit programs would continue as planned, emphasising that no reductions or interruptions would occur.

“All programs, ranging from the Konsulta to the enhanced benefit packages, are being implemented as usual. No benefit packages will be taken away or diminished this year,” he said.

Ledesma also highlighted recent improvements to the agency’s services, reporting that case rates for various medical packages were increased by 50% in 2024, resulting in an overall benefit growth of 95%. He noted that PhilHealth now offers nearly double the financial protection against healthcare costs compared to early last year.

The agency’s PHP600 billion reserve fund is a critical factor in sustaining its operations, offsetting the lack of government subsidies for 2025.

Philippine medical costs projected to increase in 2025 

While PhilHealth remains stable, healthcare costs in the Philippines are expected to rise by 18.3% in 2025, continuing a trend of significant increases, according to WTW’s latest Global Medical Trends Survey. This rate is among the highest in the Asia-Pacific region and reflects ongoing challenges in the country's healthcare system.

The survey identified several factors driving medical cost inflation, including higher demand for health services, rising hospital fees, and an increase in professional charges. A growing prevalence of chronic diseases is also contributing to the rising expenses.

Asia-Pacific trends and local challenges 

Across the Asia-Pacific region, healthcare costs are projected to grow by 12.3% on average in 2025. The Philippines, alongside Indonesia and Malaysia, is expected to see rates above the regional average. Indonesia leads the region with a projected increase of 19.4%, followed by the Philippines.

The Health Maintenance Organization (HMO) sector in the Philippines has faced mounting pressures due to rising claims. Industry losses reached PHP4.3 billion in 2023, compared to PHP1.4 billion in 2022. These losses have led HMOs to implement annual pricing adjustments to address the rising costs.

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