National Health Insurance Act of 2013

Section 24

There is hereby created a National Health Insurance Fund, hereinafter referred to as the Fund, that shall consist of: (a) Contribution from Program members; (b) Other appropriations earmarked by the national and local governments purposely for the implementation of the Program; (c) Subsequent appropriations provided for under Sections 46 and 47 of this Act; (d) Donations and grants-in-aid; and (e) All accruals thereof. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

Section 25

The National Health Insurance Fund shall have the following components: a) The Basic Benefit Fund. — This Fund shall finance the availment of the basic minimum benefit package by eligible beneficiaries. All liabilities associated with the extension of entitlement to the basic minimum benefit package to the enrolled population shall be borne by the basic benefit fund. It shall be constituted and maintained through the following process: 1) upon the determination of the amount of government subsidies and donations available for paying fully or partially the premium of indigent beneficiaries, a basic minimum benefit package affordable for enrolling as many of the indigent beneficiaries as possible shall be defined. The government subsidies will then be constituted as premium payments for enrolled indigents and contributed into the basic benefit fund. 2) for extending coverage of this same minimum benefit package to non-indigents who are not members of Medicare, premium prices for specific population shall be actusans-serifly determined based on variations in risk, capacity to pay, and projected costs of services utilized. The amounts corresponding to the premium required, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, for extending the coverage of the basic minimum benefit package for such population groups shall be contributed into the basic benefit fund. 3) for the population enrolled through Medicare Program I under SSS, the corresponding premium for the basic minimum benefit package, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, shall be charged to the health insurance fund of the SSS and paid into the basic benefit fund; 4) for the population enrolled through Medicare Program I under GSIS, the corresponding premium for the basic minimum benefit package, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, shall be charged to the health insurance fund of the GSIS and paid into the basic benefit fund; and, 5) for groups enrolled through any of the existing or future health insurance schemes and plans, including those created under Medicare Programs II and those organized by local government units, national agencies, cooperatives, and other similar organizations, the corresponding premium, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves, for extending the basic minimum benefit package to their respective enrollees will be charged to their respective funds and paid into the basic benefit fund. b) Supplementary Benefit Funds. — These are separate and distinct supplementary benefit funds created by the Corporation as eligible for use to provide supplementary coverage to various groups of the population enjoying the basic benefit coverage as are affordable by their respective funding sources. Each supplementary benefit fund shall finance the extension and availment of additional benefits not included in the basic minimum benefit package but approved by the Board. Such supplementary benefits shall be financed by whatever amounts are available after deducting the costs of providing the basic minimum benefit package, including costs of direct benefit payments, all costs of administration, and provision of adequate reserves. All liabilities associated with the extension of supplementary benefits to the defined group of enrollees shall be borne exclusively by the respective supplementary benefit fund. Upon the implementation of this Act, the following supplementary benefit funds shall be established: 1) supplementary benefit fund for SSS-Medicare members and beneficiaries. After deducting the amount corresponding to the premium of the basic minimum benefit package, the balance of the SSS-Health Insurance Fund (HIF) shall be constituted into a supplementary benefit fund to finance the extension of benefits in addition to the minimum basic package to SSS members and beneficiaries; and 2) supplementary benefit fund for GSIS-Medicare members and beneficiaries. After deducting the amount corresponding to the premium for the basic minimum benefit package, the balance of the GSIS-HIF plus the arrearages of the Government of the Philippines with the GSIS for the said HIF shall be constituted into a supplementary benefit fund to finance the extension of benefits in addition to the minimum basic package to GSIS members and beneficiaries. In accordance with the principles of equity and social solidarity, as enunciated in Section 2 of this Act, the above supplementary benefit funds shall be maintained for not more than five (5) years, after which, such funds shall be merged into the basic benefit fund.

Section 26

The use, disposition, investment, disbursement, administration and management of the National Health Insurance Fund, including any subsidy, grant or donation received for program operations shall be governed by applicable laws and in the absence thereof, existing resolutions of the Board of Directors of the Corporation, subject to the following limitations: (a) All funds under the management and control of the Corporation shall be subject to all rules and regulations applicable to public funds. (b) The Corporation is authorized to charge to the various funds under its control the costs of administering the Program. Such costs may include administration, monitoring, marketing and promotion, research and development, audit and evaluation, information services, and other necessary activities for the effective management of the Program. The total annual costs for these shall not exceed the sum total of the following: (1) Four percent (4%) of the total premium contributions collected during the immediately preceding year; (2) Four percent (4%) of the total reimbursements or total cost of health services paid by the Corporation in the immediately preceding year; and (3) Five percent (5%) of the investment earnings generated during the immediately preceding year. The period for implementation of the cost ceiling provided under this section shall not be later than five (5) years from the effectivity of this Act during which period, the total annual cost shall not exceed the sum total of the following: (i) Five percent (5%) of the total contributions; (ii) Five percent (5%) of the total reimbursements; and (iii) Five percent (5%) of the investment earnings generated during the immediately preceding year. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])

Section 27

The Corporation shall set aside a portion of its accumulated revenues not needed to meet the cost of the current year's expenditures as reserve funds: Provided, That the total amount of reserves shall not exceed a ceiling equivalent to the amount actuarially estimated for two (2) years' projected Program expenditures: Provided, further, That whenever actual reserves exceed the required ceiling at the end of the Corporation's fiscal year, the excess of the Corporation's reserve fund shall be used to increase the Program's benefits, decrease the member's contributions, and augment the health facilities enhancement program of the DOH. The remaining portion of the reserve fund that are not needed to meet the current expenditure obligations or used for the abovementioned programs shall be placed in investments to earn an average annual income at prevailing rates of interest and shall be known as the 'Investment Reserve Fund' which shall be invested in any or all of the following: (a) In interest-bearing bonds, securities or other evidences of indebtedness of the Government of the Philippines, or in bonds, securities, promissory notes and other evidences of indebtedness to which full faith and credit and unconditional guarantee of the Republic of the Philippines is pledged; (b) In debt securities and corporate bonds issuances: Provided, That such securities and bonds are rated triple 'A' by authorized accredited domestic rating agencies: Provided, further, That the issuing or assuming entity or its predecessor shall not have defaulted in the payment of interest on any of its securities and that during each of any three (3) including last two (2) of the five (5) fiscal years next preceding the date of acquisition by the Corporation of such bonds, securities or other evidences of indebtedness, the net earnings of the issuing or assuming institution available for its recurring expenses, such as amortization of debt discount and rentals for leased properties, including interest on funded and unfunded debt, shall have been not less than one and one quarter (1 1/4) times the total of the recurring expenses for such year: Provided, further, That such investment shall not exceed fifteen percent (15%) of the investment reserve fund; (c) In interest-bearing deposits and loans to or securities in any domestic bank doing business in the Philippines: Provided, That in the case of such deposits, this shall not exceed at any time the unimpaired capital and surplus or total private deposits of the depository bank, whichever is smaller: Provided, further, That said bank shall first have been designated as a depository for this purpose by the Monetary Board of the Bangko Sentral ng Pilipinas; (d) In preferred stocks of any solvent corporation or institution created or existing under the laws of the Philippines: Provided, That the issuing, assuming, or guaranteeing entity or its predecessor has paid regular dividends upon its preferred or guaranteed stocks for a period of at least three (3) years immediately preceding the date of investment in such preferred or guaranteed stocks: Provided, further, That if the stocks are guaranteed the amount of stocks so guaranteed is not in excess of fifty percent (50%) of the amount of the preferred common stocks as the case may be of the issuing corporation: Provided, furthermore, That if the corporation or institution has not paid dividends upon its preferred stocks, the corporation or institution has sufficient retained earnings to declare dividends for at least two (2) years on such preferred stocks and in common stocks of any solvent corporation or institution created or existing under the laws of the Philippines in the stock exchange with proven track record of profitability and payment of dividends over the last three (3) years; and (e) In bonds, securities, promissory notes or other evidences of indebtedness of accredited and financially sound medical institutions exclusively to finance the construction, improvement and maintenance of hospitals and other medical facilities: Provided, That such securities and instruments are backed up by the guarantee of the Republic of the Philippines or the issuing medical institution and the issued securities and bonds are both rated triple 'A' by authorized accredited domestic rating agencies: Provided, further, That said investments shall not exceed ten percent (10%) of the total investment reserve fund. As part of its investments operations, the Corporation may hire institutions with valid trust licenses as its external local fund managers to manage the investment reserve fund, as it may deem appropriate, through public bidding. The fund managers shall submit annual reports on investment performance to the Corporation. The Corporation shall set up the following funds: (1) A fund to secure benefit payouts to members prior to their becoming lifetime members; (2) A fund to secure payouts to lifetime members; and (3) A fund for any optional supplemental benefits that are subject to additional contributions. A portion of each of the above funds shall be identified as current and kept in liquid instruments. In no case shall said portion be considered part of invested assets. Another portion of the said funds shall be allocated for lifetime members within six (6) months after the effectivity of this Act. Said amount shall be determined by an actuary or pre-calculated based on the most recent valuation of liabilities. The Corporation shall allocate a portion of all contributions to the fund for lifetime members based on an allocation to be determined by the PHIC actuary based on a pre-determined percentage using the current average age of members and the current life expectancy and morbidity curve of Filipinos. The Corporation shall manage the supplemental benefits and the lifetime members' fund in an actuarially sound manner. The Corporation shall manage the supplemental benefits fund to the minimum required to ensure that the supplemental benefit payments are secure. (National Health Insurance Act of 2013, Republic Act No. 10606, [June 19, 2013])