News article from Mb.com.ph by Chito A. Chavez

SSS national benefit payouts went up by five percent from P34.10 billion (during the first five months of 2011) to P35.74 billion for the same period this year.As claimed by the SSS President and Chief Executive Officer Emilio de Quiros Jr., Southern Mindanao’s increment by 8 percent is higher than the national average of 5 percent[1].This could be rooted from the increase of maternity benefits by 11% (which is the highest rate of increase posted) as well as the increase in retirement claims by 6%. On the other hand, due to the enhancement of the ACOP, better known as the Annual Confirmation of Pensioners and the cancellation of 584 accounts, savings of P18.63 million annually for the pension funds is guaranteed.

Generally, the increase in the disbursements of SSS highlights the improvements being taken by the institution which includes electronic and internet-based transactions, intensified collection efforts, and robust investment income to name a few . These little developments provide exposure to the members which play a vital role in the introduction of annuities market in the country.

Furthermore, it could be claimed that the total contributions of the members outpaced the total amount of benefit payouts. As of March 2012, SSS’s total contribution amounted to P23,740.50 (in millions), whereby an amount of P 39,567.5 (in millions) can be expected by May and its total benefits paid as of the same period is P21,638.29 (in millions)[2]. This difference could help in the improvement of Social Security System’s objectives of building up its Investment Reserve Fund and lengthening the actuarial life of Social Security fund. The increase in the benefit claims will continue to be beneficial to its members as long as the SSS contributions are enough to pay the benefits—contributions exceed benefit payouts. 

However, the collection of SSS contributions faces a possible threat of being lesser than what it can pay out to its beneficiaries because the population growth rate of the Philippines is expected to diminish through time. As forecasted, from the annual growth rate of 1.81 (2010-2015), this will go down to 1.63 by the end of 2015 until 2020 and 1.44 by 2025[3]. This implies that in the future, there will be a lesser number of young people paying their SSS contributions and a much larger number of beneficiaries (elderly) claiming their pensions. Thus, an increase in claims of benefits (elderly) but a decrease in the contributions collected (youth) by SSS would result to a shortage in the funds.This also implies that each worker will have to support more retirees under public pension and health care systems.This shortage would give adverse effects in the future such as the increase in the implicit pension debt (IPD)[4]. It is forecasted that the IPD would reach up to P42.76 trillion in 2025 as opposed to 2010’s figure of P6.91 trillion[5]. It implies that the shortage of funds will be added to the burden of the current and future workers.

In conclusion, the SSS at present is at a good situation because the contributions they received is enough to sustain their benefits payout. However, the institution must not ignore the threats such as  demographic change in the country because it poses very adverse consequences if not addressed properly. In order to combat population aging, the country must either sustain a strong economic growth over the next several years or at least develop a strong social system that can provide economic security to the growing number of elderly[6]. With this, SSSshould already think of ways to combat such a threat.


[1] SSS members from Southern Mindanao is 2,170,002[2] Social Security System, Facts and Figures: Contributions, 2012, https://www.sss.gov.ph/sss/index2.jsp?secid=849&cat=6 (accessed July 25, 2012)
[3]NSO and Inter-Agency Technical Working Group on Population Projection,Population projection statistics index, 2004, http://www.census.gov.ph/data/sectordata/popprojtab.html (accessed July 25, 2012)
[4] Implicit pension debts refers to when pension obligations exist but there are no reserved funds to pay them thus the present value of these promises become a liability of the state or government. The state is committing future stream of revenues in order to pay these IPDs.
[5] Pineda, E. (2006). Lessons of the Chilean Pension Reform for the Philippines.
[6] Lee, S., Mason, A. & Park, D. (2011). Why Does Population Aging Matter So Much for Asia? Population Aging, Economic Growth, and Economic Security in Asia. ADB Economics Working Paper Series.




Authors:
Aguila, Philip
Bufi, Pamela
Dimaano, Lorylie
Roces, Lannie


 

News article from Manilastandardtoday.com by Macon Ramons-Araneta

A current issue that PhilHealth faces is the widening gap of health care delivery systems in rural areas such as lack of nurses, doctors and rural health center facilities. Adding to the pressure is the phasing out of all charity wards in the country. These charity wards provide low cost hospitalization services to the poor in both rural and urban locations. The government plans to commence the full establishment of PhilHealth centers by next year, which would provide the poor free hospitalization, medicines and laboratory costs. However, even though the transition would provide free medical services for the poor, many poor families are still unaware of the benefits offered by PhilHealth and the aim of the current administration’s Universal Health Care.

The establishment of the PhilHealth centers will benefit the poor in the future but they must be able to properly monitor the existing health centers--distribution of doctors, nurses and medical staffs. PhilHealth must also ensure that the poor will be properly oriented so that they may be aware of the different benefits that they can avail. Though this new development will have positive impacts on the poor, it may still lead to the same problem of the widening of gaps especially in the rural areas because there is no guarantee that PhilHealth’s plan will be sustainable in the future since it is not enough to just establish centers considering the lack of medical staff.  

Moreover, partly the reason why their plan may not be sustainable due to small allocation of money is because the market for insurances will only concentrate to the country’s middle class since they have the capability to pay for their pensions/insurances/annuities premiums for their future. However, the poor cannot afford to pay the premiums of insurance companies (PhilHealth and private companies) for their health concerns, which is why they become largely dependent on government assistance.


Authors:
Aguila, Philip
Bufi, Pamela
Dimaano, Lorylie
Roces, Lannie

 

News article from Philstar.com by Mayen Jaymalin

     With the improvement of the claims processing systems of The Philippine Health Insurance Corporation (PhilHealth), the claims have significantly increased from 340,000 to 450,000/month. This improvement is largely a result of their shift from a manual processing system to an electronic one. Not only did this develop their efficiency and decreased delays in claims but it also provided convenience to the beneficiaries.

     To be familiar with the PhilHealth rules of claiming the benefits, they only deny claims filed beyond 60 days after the patient has been discharged from the hospital. Incomplete claims with requirements, inconsistencies with the members' claim data, which includes proofs of contribution, dependency, hospital billing, and other discrepancies, are factors that delay the processing of claims according to the reviews made by PhilHealth and the health care providers. Thus with the improvement of the claims system, these discrepancies are properly addressed because their records become more accurate. These little developments would provide a significant amount of exposure to the members, which is crucial to the introduction of the annuities market in the future. These small changes will greatly affect the future especially when the projections of the country’s population show the high possibility of a significant increase in the claiming of insurance benefits by the members.

     Though this new measure of electronic processing system provided a good impact on the beneficiaries, it would also be best if PhilHealth would address other serious problems such as the implementation of the CEWS or the Claims Eligibility We Service. Moreover, PhilHealth should work on reaching its target number of services mandated by the law in order to provide universal health coverage to all Filipinos because two years ago, it had only delivered health care services to 85% of its target, which according to the law is not universal.


Authors:
Aguila, Philip
Bufi, Pamela
Dimaano, Lorylie
Roces, Lannie