Work package 6

The Philippines – The impact of extending the National Health Insurance Program to the poor and informal sector


Prior to 1995 less than half of the population of the Philippines had health insurance cover and coverage was largely restricted to those working in the formal sector. Cover was limited to less than 50 percent of inpatient care costs. The National Health Insurance Program (NHIP) was introduced in 1995 with the intention “to prioritize and accelerate the provision of health services to all Filipinos, especially that segment of the population who cannot afford such services.” Coverage did start to increase (albeit after a couple of years), but only among formal sector workers. Enrolment among the poor and informal sector families remained low through to the end of the Millennium.

The intervention

In recent years there have been a number of policy reforms intended to raise health insurance coverage of the informal sector and the poor. In late 1999, the individual paying program (IPP) was launched, aimed primarily at the non-poor informal sector, and financed through a flat-rate premium. In 2001, the indigent program, which was implemented first by the city of Dagupan in 1997 and subsequently rolled out nationwide albeit with very limited coverage, was renamed Medicare para sa Masa and became a national priority program of the government, with central and local governments splitting the enrolment cost, the share varying according to the fiscal capacity of the local government. The last few years have seen increased finance going into Medicare para sa Masa with a big push towards universal coverage among the poor. The costs of different aspects of inpatient care are reimbursed up to a specific amount, with separate ceilings for different cost categories (e.g. room and board, drugs and medicines, etc.). Indigent members are also eligible for outpatient care in accredited government-run rural health units.


Previous studies suggest, but do not confirm, that NHIP has had only a muted impact on health care utilisation and financial risk protection. This study will seek to identify the quantitative impact of NHIP on:

  • Health care utilisation, especially of the poor
  • OOP payments for health care and household consumption
  • Health service delivery and financing at the local level

Previous studies were based on surveys that did not report NHIP membership (but only membership of any insurance scheme), detailed health expenditures, insurance benefits received, or health service utilization. Other studies were not based on nationally representative samples.
The study is opportune in that the PhilHealth is currently evaluating its benefit packages and enrolment strategies. Moreover, the national government is considering other financing options to secure local government financing commitments to the NHIP. The study will provide policy relevant evidence relating to:

  • The identification of eligible groups, such as the poor, through household characteristics;
  • Benefit packages or amounts of benefit ceilings that can increase service utilization;
  • Setting of support values to reduce out-of-pocket payments and financial risks;
  • Design of provider payments to ensure quality of performance;

Incentives to local governments to enrol indigents and provide better services to the insured population