The National Health

Insurance Act R.A. No.

7875 as amended by
R.A. 9241
 National Health Insurance Act of 1995 or "An Act Instituting a National
Health Insurance Program For All Filipinos and Establishing the Philippine
Health Insurance Corporation For the Purpose“
 Signed into law on February 14, 1995 by Pres. Fidel Ramos

 The National Health Insurance Program (NHIP), formerly known as

Medicare, is a health insurance program for SSS members and their
dependents whereby the health insurance subsidize the sick who may find
themselves in need of financial assistance when they get hospitalized.

 The Philippine Health Insurance Corporation or PhilHealth is the

mandated administrator of the Medicare program under the National Health
Insurance Act of 1995 (R.A. 7875)

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 Capitalization
Capitation is a payment mechanism where a fixed rate, whether
per person, family, household or group is negotiated with the
health care provider who shall be responsible for delivering
or arranging the delivery of health services required by the
covered person under the conditions of a health provider
contract.

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History: Philhealth
 In 1963, DOH secretary Francisco Quimson Duque, the father of the current DOH secretary,
proposed the formation of a National Health Service of the Philippines under the
administration of President Diosdado Macapagal.

 RA 6111 or the Philippine Medical Care Act was signed into law by President Ferdinand
Marcos in 1969.

 Medicare Program Phase I was started in 1972. Target beneficiaries were SSS/GSIS members.
 Medicare Program Phase II was started in 1983. Target beneficiaries were low-income and
non-salary based populations not covered by Phase I. Tie-ups with LGUs and HMOs were
done.

 In the early 1990s, The Health Finance Development Project (HFDP) a DOH project funded by
USAID-MSH conducted several studies regarding social health insurance and was crucial in
the creation of PhilHealth.

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 RA 7875 was signed into law on February 14, 1995.
 GSIS and SSS transfers the Medicare Program to PhilHealth in 1997.
 Abra was the first province in the country to adopt the Indigent Program, October 1, 1997.
 Decentralization of claims processing starts in Region VI, March 1999.
 Launching of the Individually Paying Program for the Informal Sector, October 1, 1999.
 Launching of the first OPD Package in Laguna and Capitation as provider payment scheme,
July 2000.
 Introduction of Dialysis Package and OPD AntiTB/DOTS Benefits Package, April 1, 2003.
 Maternity Care Package for SVD and SARS package, May 1, 2003.

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Why Medicare was replaced by Philhealth?
 to accelerate universal coverage (health insurance for ALL Filipinos)
 to enhance and expand a unified benefit package that can be used by ALL members,
regardless of category
 consolidate separate Medicare programs given by the SSS, GSIS and OWWA

Note:
Before PhilHealth was created, there used to be different premium contributions and
different benefit packages for those mandated to have social health insurance. PhilHealth
changed all that by requiring EVERYONE to procure social health insurance. Also, there
would be A SINGLE UNIFIED BENEFIT PACKAGE although premium contributions
are still based on salaries/wages in the case of formal sector employees and on household
earnings & assets in the case of the self-employed. The rich would subsidize the poor
and the healthy would subsidize the sick. (Social Solidarity Concept)

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Facts about PhilHealth
• The purpose of PhilHealth is to ensure the provision of affordable, available and accessible
health care services for ALL citizens of the Philippines.
• PhilHealth’s goal is universal coverage (defined as 85% of the Philippine population) by the
year 2010.
• Limited to paying for the utilization of health services by the covered beneficiaries or to
purchasing health services in behalf of the beneficiaries.

Prohibited from:

1. Providing health care directly

2. Buying and dispensing drugs and pharmaceuticals
3. Employing physicians and other professionals for the purpose of directly rendering care
4. Owning or investing in health care facilities

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• Exempted from paying corporate taxes because it is a government owned and
controlled corporation.
• Can sue and be sued in court
• Has quasi-judicial powers – can issue subpoenas, investigate, and decide upon
complaints. PhilHealth is NOT bound by the technical rules of evidence.

• All government and private EMPLOYERS are required to register their employees
with PhilHealth within 30 days after hiring them.

• Members and their dependents are eligible for confinements outside the country
provided the following are submitted within 180 days after discharge: official receipt
from the health care institution and certification of the attending physician as to the
final diagnosis, period of confinement and services rendered.

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 Sec.54 of RA 9241 – Oversight Provision – Congress shall conduct a regular
review of the National Health Insurance Program which shall entail a
systematic evaluation of the Program’s performance, impact or
accomplishments with respect to its objectives or goals. Such review shall
be undertaken by the Committees of the Senate and the House of
Representatives which have legislative jurisdiction over the Program. The
National Economic and Development Authority, in coordination with the
National Statistics Office and the National Institutes of Health of the
University of the Philippines shall undertake studies to validate the
accomplishments of the program. The budget required to undertake such
study shall come from the income of PhilHealth.

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Coverage

1. Members In The Formal Economy - “includes those with formal contracts and
fixed terms of employment including workers in the government and private
sector, whose premium contribution payments are equally shared by the
employee and the employer.”

2. Sponsored Members – “includes members whose contributions are being paid for
by another individual, government agencies, or private entities.”

3. Members In The Informal Economy – “includes a wide range of individuals and

sectors ranging from the self-earning to migrant workers.”

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4. Lifetime Members – “members who have reached the age of retirement under
the law and have paid at least 120 monthly premium contributions.”

5. Indigent Members – “persons who have no visible means of income, or

whose income is insufficient for family subsistence, as identified by the
Department of Social Welfare and Development (DSWD), based on specific
criteria.”

6. Senior Citizens – “those who are 60 years old and above and are not
currently covered by any of the existing membership categories of PhilHealth.” 

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 Dependents
Legal Dependents
a) legitimate spouse who is not a member
b) unmarried and unemployed legitimate, legitimated, illegitimate, acknowledged
children as appearing in the birth; legally adopted or stepchildren below 21 years of
age
c) children who are twenty-one years old or above but suffering from congenital
disability, either physical or mental or any disability acquired that renders them
totally dependent on the member for support
d) parents who are 60 years old or above whose monthly income is below the amount to
be determined by the Corporation in accordance with the guiding principles set for in
Article I of RA 7875

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Legal Dependents

 Remember that paramours are not covered by PhilHealth, but illegitimate children
are – as long as they are below 21 years of age.

If the children are physically/mentally handicapped, they are still considered

dependents even if they are more than 21 years of age.

Note that parents greater than 60 years old are considered dependents also.

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 The National Health Insurance Fund
 The money PhilHealth is working with, has 3 components:
1. Basic benefit funds- finance the basic minimum package to be enjoyed by ALL members. The
National Government and the Local Government Unit pays for the premium contributions of
indigents. For non-indigents, premium prices for specific population shall be actuarially determined
based on.
(a) Variations in risk;
(b) Capacity to pay; and
(c) Projected costs of services utilized.
2. Supplementary benefit funds- finance the extension and availment of ADDITIONAL BENEFITS not
included in the basic minimum benefit package BUT approved by the Board. However, in accordance
with the principles of equity and social solidarity, after 5 years, such funds shall be merged into the basic
benefit fund.
3. Reserve funds- a portion of PhilHealth’s accumulated revenues not intended to meet the cost of the
current year’s expenditures; it shall not exceed a ceiling equivalent to the amount actuarially estimated
for two years of projected program expenditures. The funds are to be invested in interest-bearing bonds,
securities, deposits/loans/securities to any domestic bank and stocks of corporations.

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 Administration costs of PhilHealth shall not exceed 12% of the total contributions,
including government contributions to the program AND not more than 3% of the
investment earnings collected during the immediate preceding year.
 PhilHealth has the following sources of funds:
1. Premiums
a. Individual
b. National Government
c. Local Government
2. Grants and Donations
3. Investment Earnings
4. Sin Taxes

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 Philhealth Membership
Requirements:
(any of the following)
 Birth Certificate
 Baptismal Certificate
 GSIS/SSS Member’s ID
 Passport
 Any other valid ID/document acceptable to the Corporation

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 The Benefit package to be enjoyed by all
members including the following:
1. Inpatient hospital care
a. Room and board
b. Services of health care professionals
c. Diagnostic, laboratory and other medical examination services
d. Use of surgical or medical equipment and facilities e. Prescription drugs and
biologicals; subject to limitations stated in Section 37 of RA 7875
2. Outpatient care
a. Services of health care professionals
b. Diagnostic, laboratory and other medical examination services
c. Personal preventive services d. Prescription drugs and biologicals, subject to
limitations stated in Section 37 of RA 7875

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3. Health Education Packages
4. Emergency and transfer services
5. Other health care services that PhilHealth shall determine to be
appropriate and cost effective

Note:
 In RA 7875, normal obstetrical deliveries, out-patient psychotherapy and
counseling for mental disorders and home & rehabilitation services used to be part
of excluded personal health services. After RA 9241 amended RA 7875, PhilHealth
could now include these services in the minimum basic package. PhilHealth
currently pays up to 2 normal spontaneous vaginal deliveries.

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 Premium Contribution
▫ The amount of premium contribution shall NOT exceed 3% of the members’
respective monthly salaries to be shared equally by the employer and employee.
The member’s monthly contribution shall be automatically deducted by the
employer from the former’s salary, wage or earnings.

▫ At present, one’s premium contribution is 2.5% of the salary base(SB) divided

equally at 1.25% each for the employee and the employer. The salary cap is set at
P25,000, above which one’s monthly premium contribution remains the same, e.g.
One’s monthly contribution remains at a total of P625even if one’s salary is
P25,000, P50,000 or P500,000 a month.

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 Payment of Claims
to Health Care
Providers
Mechanism:
1. Fee for service
2. Capitation payment
3. Case Payment

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 Hospital confinements of less than 24 hours shall be compensated only if:
• The patient dies
• Patient is transferred to another health care institution
• Emergency cases
 Claims in non-accredited health care institutions shall be compensated if it
meets the following conditions:
• Health care institution has DOH license
• Emergency case
• Physical transfer/referral to accredited health care institution is impossible

 Physicians must not charge over and above the professional fees provided by
the NHIP for members admitted to PhilHealth bed.

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 Offenses
 Offenses of Institutional Health Care Providers(punishments includes a fine bet
P10,000- P50,000, suspension of accreditation for 3 months or more and criminal
liability)
1. Padding of claims
2. Making claims for non-admitted patient
3. Extending period of confinement
4. Post-dating of claims
5. Misrepresentation by furnishing false/incorrect information
6. Filing of multiple claims
7. Unjustified admission beyond accredited bed capacity
8. Unauthorized operations beyond service capability (performing complex procedures in a primary
hospital)
9. Fabrication/Possession of fabricated forms and supporting documents
10. Other fraudulent acts

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 Offenses of Health Care Professionals (punishments includes a fine between
P10,000- P50,000, suspension of accreditation for 6 months-3 years and
criminal liability)
1. Misrepresentation by false/incorrect information
2. Breach of warranties of accreditation
3. Other violation whether willful or negligent
 Offenses of Employers
1. Failure/Refusal to deduct contributions
2. Failure/Refusal to remit contributions
3. Unlawful deductions
4. Offenses committed by an institution(association, partnership, corporation,
etc)

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 THANK YOU 

prepared by: Alexis Erica

Ovalo
BSA-3