PhilHealth or HMO? Why your PHP 500 still matters

By Rjay Zuriaga Castor

ILOILO CITY — The Philippine Health Insurance Corporation Region 6 (PhilHealth-6) has urged members to continue paying their contributions even if they are already covered by private health maintenance organization (HMO) plans.

The agency said the state health insurance program extends coverage to a member’s entire family and offers benefits that complement, rather than duplicate, private insurance.

PhilHealth-6 Regional Vice President Marjorie Cabrieto said the minimum monthly premium of PHP 500 already covers qualified dependents listed under a member’s account.

“That PHP 500 will cover the entire family — your wife, your dependents, your children below 21 years old. For only PHP 500, any member of the family who is admitted anytime of the month or week can avail of benefits,” Cabrieto said in a press conference on Tuesday, Aug. 11.

She made the statement amid sentiments among some members that private HMOs offer greater value than PhilHealth coverage.

Cabrieto said PhilHealth contributions should be viewed differently from HMO premiums, noting that private plans generally require additional payments when dependents are added.

“That is their opinion and their understanding. But for us in PhilHealth, it is important that we get the message across. ‘If I am paying for an HMO.’ How much? Thousands of pesos, but you are the only member. If you are going to add a dependent, you have to pay another premium,” she said.

Cabrieto also said PhilHealth and private HMOs should not be treated as competitors but as complementary providers of health coverage.

Under existing rules, PhilHealth serves as the mandatory first payer for covered health services, while private HMOs may cover services and expenses that PhilHealth does not fully shoulder.

She said HMOs could help settle hospital expenses that remain after PhilHealth benefits have been applied, particularly for patients who want broader coverage in private facilities.

The PHP 500 floor reflects the 5 percent premium rate in force for 2026, applied to the monthly income floor of PHP 10,000 set under Republic Act No. 11223, or the Universal Health Care Act.

Members earning PHP 100,000 or more pay the maximum premium of PHP 5,000 a month, while employed members split the amount equally with their employers. The 5 percent rate is the final scheduled adjustment under the law.

Cabrieto acknowledged that some members have expressed dissatisfaction with PhilHealth case rates, and that a few have considered leaving the program.

PhilHealth-6 data, however, showed that 93 percent of patients discharged from hospitals had zero balance billing.

She said PhilHealth coverage in private facilities currently represents about 40 percent to 50 percent of the total support value.

Patients shoulder the remaining costs depending on the hospital’s rates and the services provided.

“Frankly speaking, we cannot approximate a 100 percent payment in private facilities because their rates are really high. Since PhilHealth is an insurance program, it only pays for the direct cost of care,” Cabrieto said.

To improve coverage, PhilHealth is reviewing its existing case rate system and considering a shift toward diagnosis-related groups (DRGs).

Cabrieto said the current system may provide the same payment for patients diagnosed with the same condition, even when one patient has additional illnesses requiring more extensive treatment.

Under DRGs, she said, PhilHealth would be able to consider comorbidities and other factors in determining how much it pays hospitals, potentially increasing support for patients with more complex medical conditions.

The transition is mandated under the Universal Health Care Act. PhilHealth issued Circular No. 2026-0012 on July 30, 2026, requiring hospitals to take part in shadow billing, a data-gathering exercise in which facilities submit detailed inpatient claim information under DRG rules while still being paid under the case rate system.

PhilHealth President and Chief Executive Officer Edwin Mercado told BusinessMirror in November 2025 that 2027 is the earliest year the DRG system could be implemented in full.

A 2025 study by the Philippine Institute for Development Studies found that the All Case Rates system, introduced in 2013, had fallen behind actual hospital costs, with 98.8 percent of claims exceeding what PhilHealth reimburses.

She added that PhilHealth-6 is strengthening its information campaign to reach more members and address gaps in their understanding of the program.

“Maybe despite the massive and intensive information campaign that we have, it still may not be reaching all our members […] We are strengthening our information campaign,” she added.