Tax benefit seen to cushion Philhealth members from adjusted contributions

Dr Eduardo Banzon

MANILA: The Philippine Health Insurance Corp (Philhealth) has said a tax benefit would cushion the bulk of its self-employed and individually paying members — those earning not more than P250,000 yearly — from the upward adjustment of contributions.

“We expect most of our 4.22 million self-employed members to be shielded by a tax allowance,” said Dr Eduardo Banzon, Philhealth president and chief executive officer.

Banzon was referring to a concession under the National Internal Revenue Code (NIRC) that allows salaried workers and self-employed individuals to spend up to P2,400 yearly for health and/or hospitalization insurance premium, and then deduct the amount from their taxable income.

The implementing rules of Section 34, Chapter 7 (Allowable deductions) of the NIRC states:

“Premiums on Health and/or Hospitalization Insurance – The amount of premiums not to exceed P2,400 per family or P200 a month paid during the taxable year for health insurance and/or hospitalization insurance taken by the taxpayer for himself, including his family, shall be allowed as deduction from his gross income: Provided, That said family has a gross income of not more than P250,000 for the taxable year: Provided, finally That in the case of married taxpayers, only the spouse claiming the additional exemption for dependents shall be entitled to this deduction.”

Effective July 1, 2012, self-employed individuals contributing on their own would pay the minimum annual premium of P2,400.

However, for those who pay by the end of June, their discounted premium for the whole of 2012 would be fixed at only P1,200.

Moreover, individually contributing members who sign a policy contract by the end of June and commit to pay in lump for two consecutive years, would enjoy a discounted premium pegged at P1,200 annually, or P2,400 for the entire 24-months of 2012-2014.

The new rates are meant to enable Philhealth to fulfill its mandate to provide constantly improving health care to every Filipino.

Meanwhile, Banzon stressed that the adjusted contributions would not affect Philhealth members under the Sponsored Program.

The 5.2 million indigent families identified under the Department of Social Welfare and Development’s National Household Targeting System for Poverty Reduction (NHTS-PR) are already enrolled as Philhealth members, with their premiums subsidized by the national government, Banzon said.

“These are also the same 5.2 million poorest households targeted by government as direct cash transfer beneficiaries,” he pointed out.

On top of the 5.2 million needy families, Banzon said another five million disadvantaged households not covered by the NHTS-PR have also been enrolled as Philhealth members, again with their premiums subsidized by their local governments.

Philhealth provides subsidy for room and board, drugs and medicines, laboratory exams, as well as operating room and professional fees for hospital confinements of not less than 24 hours. It is also covering an increasing number of outpatient services, including day surgeries and treatment of tuberculosis.

The subsidy covers every active member as well as his/her declared eligible dependents.