National Health Insurance Program financing during the COVID-19 pandemic: financial viability and the burden of paying for NHIP benefits

This paper examines the state of National Health Insurance Program (NHIP) financing during the COVID-19 pandemic in the Philippines, an event which coincides with the implementation of the Universal Health Care (UHC) mandates on restructuring the NHIP premium schedule, providing immediate eligibility to NHIP benefits, and expanding member benefits. Using the ratio of total expenditures to total revenues as the measure of financial viability, it shows that the NHIP remains financially viable during the COVID-19 pandemic year of 2020. Projections for 2021 however show that NHIP financial viability may be adversely affected by the significantly higher number of COVID-19 cases with the negative effect mitigated only if COVID-19 benefit claim patterns remain as weak as observed for 2020. On the revenue side, the potential for a lower premium is observed to be offset by the higher rates in the UHC mandated premium schedule. On the expenditure side, potential increases associated with the implementation of immediate eligibility and the introduction of COVID-19 benefits are mitigated by lower NHIP benefit utilization due to reduced mobility and access to health facilities. Secondary analysis on who has to bear the burden of paying for NHIP benefits, however, shows that the implementation of UHC financing initiatives may heighten adverse incentives on members’ willingness to pay premiums. Using the benefit expenditure-premium contribution ratio as the measure for the burden of paying for NHIP benefits, it is shown that the Formal Economy sector shoulders the burden of funding the NHIP benefits of the Informal Economy and Sponsored sectors.