Statement | 20 December 2024

I have been reading comments about the Philhealth Issue. It seems many do not understand the difference between pension and health insurance.

Pension insurance and health insurance serve distinct purposes, providing financial protection in different ways. Here are the main differences:

Primary Objectives

1. Pension Insurance: Provides a steady income stream after retirement, ensuring financial stability and security during old age.

2. Health Insurance: Covers medical expenses, hospitalization, and other healthcare-related costs, protecting against financial strain due to illness or injury.

Key Features

1. Pension Insurance:
– Typically offered by employers or purchased individually.
– Contributions are made during working years.
– Benefits are paid out after retirement, usually as a monthly annuity.
– Often includes survivor benefits and lump-sum payments.

2. Health Insurance:
– Covers hospitalization, surgical procedures, doctor visits, and other medical services.
– May offer additional benefits like dental, vision, and wellness programs.
– Premiums are paid monthly or annually.
– Benefits are paid out when medical services are utilized.

Eligibility and Enrollment

1. Pension Insurance: Eligibility is often tied to employment or age (e.g., 60 or 65).

2. Health Insurance: Generally available to individuals, families, or employees through group plans.

Benefit Structure

1. Pension Insurance: Benefits are typically based on salary, years of service, or contributions.

2. Health Insurance: Benefits are determined by policy terms, coverage limits, and out-of-pocket expenses.

Tax Implications

1. Pension Insurance: Contributions may be tax-deductible; benefits are taxed as income.

2. Health Insurance: Premiums may be tax-deductible; benefits are generally tax-free.

Purpose and Timing

1. Pension Insurance: Long-term savings for retirement, providing income replacement.

2. Health Insurance: Short-term financial protection against medical expenses.

Please note that specific details may vary depending on the country, provider, or policy. In the Philippines, for instance, the Social Security System (SSS) and Government Service Insurance System (GSIS) offer pension insurance, while health insurance is provided by the Philippine Health Insurance Corporation (PhilHealth) and private insurers.

Philhealth Management [which is distinct from the Board of Directors] have treated the PhilHealth funds like a pension fund. That’s why their emphasis has been to protect the fund and resist paying the health benefits of its members!

We need to fix this broken system.

TEODORO J. HERBOSA, MD
Secretary of Health
and PhilHealth Chairman of the Board

URL: https://www.facebook.com/share/p/12B13viN5XX/