Bill filed regulating medical care insurance providers
SEN. Christopher Lawrence “Bong” Go on Thursday filed a bill seeking to amend Presidential Decree 1460 or the “Insurance Code of 1978” by institutionalizing regulations governing health maintenance organizations (HMOs).
“The coronavirus disease has underscored to many Filipinos the need to invest in health care. As insurance markets become more competitive, we have to be proactive, revisit our policies and ensure that the necessary safeguards are in place to protect public interest,” Go said in his explanatory note on Senate Bill 2133.
“Market access alone is not enough. Regulatory reforms are also needed if we want to ensure fair and vigorous competition,” he explained.
The senator, who heads the Senate health and demography committee, also pointed out that insurance, pre-need and HMOregulated entities are making significant contributions to the country’s economy.
Life insurance, non-life insurance and mutual benefit associations commanded an industry asset base of P1.72 trillion in the second quarter of 2019, an 11.79-percent increase from the P1.54 trillion recorded during the same period the previous year.
For HMOs, industry assets grew from P32.91 billion in 2017 to P38.96 billion in 2018.
At the same time, total revenue grew by 15 percent from P39.32 billion to P45.30 billion.
Under Executive Order 192-2015, the Insurance Commission was granted jurisdiction over HMOs, but ambiguity remains over whether the provisions of the Insurance Code also apply to the said organizations.
To correct this, Go proposes to amend the Insurance Code and explicitly include HMOs into the law’s coverage, which shall enable the commission to provide stricter supervision to better protect the industry and in insuring the public from unscrupulous practices.
In a move meant to enhance industry competition, he said HMOs will be subjected to the provisions of the Insurance Code. These provisions include the commission’s powers to issue cease-and-desist orders to prevent fraud or injury to the public.
Under the bill, the Insurance Commission shall be converted into a collegial body composed of five commissioners, including a chairman and three members who shall be appointed by the president, and a senior officer designated by the Bangko Sentral ng Pilipinas (BSP) governor as ex-officio commissioner.
Go also proposed putting the commission under the supervision of the BSP so all financial service providers in the country are regulated by a single regulatory authority.
With regard to the commission’s powers and authority, the bill seeks the following amendments:
– Give the commission authority to direct every aspect of its organization, management, operations and administration;
– Grant the commission primary and exclusive power to adjudicate claims involving pre-need plans and HMO products or services; and
– Strengthen the commission’s regulatory power to examine state insurance agencies.
Under the last amendment, all state insurance agencies, including the Philippine Health Insurance Corp., or PhilHealth, will be examined for their financial condition and methods of transacting business at least once every two years and mandated to implement any and all findings by the Insurance Commission.
A report based on the examination shall be submitted to the commission’s Governing Board, BSP, Office of the President and two chambers of Congress.