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the subsidy coming from the high-income, low-risk groups. In this aspect, the NHIP-SP and HCFP differs. From its inception, the NHIP-SP is already part of a nationwide risk pool, in contrast to the previous Medicare Program that was concentrated on the employed population in the formal and informal sectors. In addition to the indigent and employed population groups9, the PhilHealth now targets and provides lifetime coverage to retirees and pensioners. As of June 2004, the members under the Sponsored Program accounted for about 47.8 percent of the total membership. What is perhaps more impressive is that high indigent coverage is achieved in all regions in the country (Table 8). As mentioned above, these enrolment trends were mainly the consequence of the national government’s Plan 5M, which essentially “absolved� the LGUs from their financial obligations and temporarily transferred this obligation to the Philippine Charity Sweepstakes Office. Without the Plan 5M, the risk pool of the NHIP-SP would have been more limited, considering that many LGU still failed to sponsor most of their poor constituents. Even with a highly variable enrolment of the poor across regions, the PhilHealth itself is in a position to attenuate the resulting risks. By law, it is tasked to administer the National Health Insurance Fund (NHIF), which includes contributions from program members, balances from the Medicare Program, special government appropriations, donations and grants-in-aid, and accruals. Currently, the NHIF comprises the benefit fund and the reserve fund. The PhilHealth draws from the benefit fund to finance all benefit packages provided to different members.10 The PhilHealth keeps under the reserve fund all unexpended revenues in the current year. Thus, cross-subsidization among pools of members is implicit in the structure of the NHIF. In contrast, the HCFP, as originally conceived, does not have the same flexibility. The provincial FMBs are each tasked to manage all HCFP funds and to provide coverage to all target beneficiaries within their respective jurisdictions, independent of other provinces and other health insurance programs. Thus, risk pooling across regions or population groups at the program level was not possible. Also, the FMBs were not allowed to keep reserves. All unexpended fund balances for the current year becomes part of the beginning balance in the follow-
9
The employed population groups include employees in the government and the private sector, the selfemployed, overseas Filipino workers, and professionals in private practice such as doctors, lawyers, and dentists. 10 According to Republic Act 7875, contributions of members from the government and the private sector shall not exceed three percent of their monthly salaries; contributions of self-employed members shall not exceed three percent of their estimated actual net income for the preceding year; and contributions made in behalf of indigent members shall not exceed the minimum contributions set for employed members.