The insurance seemed to protect the government from PhilHealth’s cost nightmare

The Asian Development Bank (ADB) has said that the government should consider reimbursing funds to reduce the government’s exposure to health care costs during pandemics and epidemics.

“The insurance will allow a category of risk (such as epidemic risk) or a portion of the risk of claims to be transferred to the PhilHealth portfolio,” ADB said in a paper issued on December 24.

It also added that reinsurance options are commercially available to limit pandemic and pandemic risk.

ADB said that among the common options for epidemics and pandemics is stop loss insurance, which provides coverage when claims exceed a certain threshold, to protect PhilHealth from sudden increases in claims during such events.

“In this model, PhilHealth and the reinsurer will share equally in all premiums and losses arising from an epidemic or pandemic event,” ADB said.

It added that reintroduction leads to pandemic risk matching, risk-based pricing, capital assistance, and more.

ADB highlighted several benefits of reinsurance, including access to pandemic risk models, risk-based pricing, and liquidity.

At the same time, he reiterated the need for PhilHealth to have clear policies to prevent epidemics and epidemics in order to manage its premiums and reserves effectively.

PhilHealth said it has reserves of P281 billion set aside to meet benefit payments for two years and a surplus of P150 billion as of October.

It also had an investment portfolio of P489 billion as of November.

ADB said that although PhilHealth has been able to provide benefits to policyholders for the coronavirus disease 2019 (COVID-19) due to the reserve, this may not be the case and is “an unreliable way to access disaster funds.”

Social insurance companies often exclude epidemic-related protection, treatment, and vaccination due to insufficient data on their severity and frequency, it noted.

However, during the COVID-19 pandemic, PhilHealth was ordered to extend benefits to close the protection gap.

Last week, the bicameral congressional committee stripped PhilHealth of funding in the proposed 2025 budget.

In response, PhilHealth President and Chief Executive Officer Emmanuel R. Ledesma, Jr. ensure that users will still have “uninterrupted access” to their advantage.fits and no reduction despite zero aid next year. – Aubrey Rose A. Inosante