Sustainability of the National Government Premium Subsidy for Indigents

The national subsidy for indigent PhilHealth members identified under the National Household Targeting System for Poverty Reduction (NHTS-PR) began in 2011, in line with the government's call for universal health coverage. The subsidy involved making all individuals identified under the NHTS-PR automatically eligible for PhilHealth benefits. In 2014, the subsidy reached PHP 35 billion, which was sourced from the sin tax revenue. According to literature, health service use is anticipated to improve along with health insurance coverage. This paper explores how this change will affect the funds coming from the sin tax revenue for premium subsidy and PhilHealth's resources for benefit payment by examining administrative data and estimating loss ratios. The study finds that resources will be available for the premium subsidies but PhilHealth's collection from premiums will be much lower than the benefit payments.