Response of health insurers to the Covid-19 pandemic

The Insurance Commission conducted a survey on health insurers to determine their overall response to the Covid-19 pandemic. The survey was conducted from April 16 to May 8, 2020. Surveyed were life and non-life insurance companies, Mutual Benefits Associations (MBAs) and Health Maintenance Organizations. Owing to the sudden emergence of the pandemic, which was declared by the World Health Organization (WHO) on March 11, 2020, the Commission was blind to the real situation on the ground. Moreover, it was unprecedented in contemporary history. There was a real need to find out what was happening, and a survey was the only way to find out. The life and MBA sectors had 100 percent respondents, the non-life had 96 percent and the HMO sector had 89 percent respondents. Out of those surveyed, 58 percent issued health insurance products, of which 61 percent covered pandemic cases.

The health insurers surveyed paid a total of P326.95 million in benefits (all figures were as of the last date of the survey). Of this amount, P307.26 million was in payment of contractual obligations. P19.68 million was ex-gratia, meaning paid out of the generosity of the insurer. A total of P308.16 million in insurance claims were made. The benefits can be classified as medical benefits, death benefits, and other benefits.

It is worthy to note that a majority of those surveyed (93 entities) stated that they will consider or continue to provide coverage for pandemic cases in the future as they believe that it is part of their obligation to provide this kind of critical and much-needed assistance to their clients. In the life sector, 22 life insurers expressed willingness to provide coverage for pandemics in the future, 8 answered they would be unwilling. It is more divided in the non-life sector, with 26 non-life insurers willing to provide pandemic coverage in the future and 28 unwilling. For the MBAs, 26 out 33 licensed MBAs said that they would be willing to cover pandemics in the future. Nineteen HMOs affirmed that they will continue covering pandemics in the future.

Medical benefits

Let us break down the P307.26 payments pie. Of this amount, P258.8 million was claimed for Medical Benefits. The medical benefits include in-patient, out-patient, medical reimbursement, daily hospitalization benefits, and critical illness benefits. For medical benefits, P239.5 million was paid for contractual obligations, while P19.2 million was paid ex-gratia.

The highest medical benefits went to in-patient benefit with claims amounting to P124.3 million. Of this amount, P93.26 million was for contractual obligations, while P16.73 million was paid ex-gratia. The second highest benefit went to critical illness with P23.22 million in claims. Out-patient benefit totaled P74.89 million. Medical reimbursement benefit amounted to P130 million (all from the life sector), and the daily hospitalization benefit amount to P0.87 million.

Benefits paid by sector

The biggest responder to the pandemic, in terms of Medical Benefits, is the HMO sector with P231.36 million in claims paid. This is 89.40 percent of the P258.8 million total Medical Benefits claims paid. The life and non-life sectors paid P14.44 million and P12.99 million, respectively, in Medical Benefits.

The life insurance sector, expectedly, paid the most Death Benefits at P59.14 million, or 96 percent of the total P61.54 million death benefits paid. The MBAs and the HMOs paid P2.01 million and P0.39 million, respectively.

The life insurance sector also paid the most for Other Benefits (which include travel inconvenience, travel cancellations and delays, cash assistance, and others) at P4.45 million, or 67.32 percent of the total P6.61 million Other Benefits paid. The non-life and the MBA sector paid P1.51 million and P0.35 million, respectively.

Life insurance perspective on the pandemic

A total of 26 life insurers, out of the 30, sell health insurance products, of which 22 cover pandemics. Nonetheless, two of the life insurers which excluded pandemics will still accommodate Covid-19 related claims due to the call from the Commission to cover such claims (CL 2020-19 and 2020-24). Confirmatory testing is covered by nine life insurers. Eighteen life insurers have reported 887 Covid-19 related claims.

Non-life insurance perspective on the pandemic

FIFTY-four out of 56, or 96 percent, of the non-life insurers responded to the survey. And 27 of the respondents confirmed that they issue health insurance products but only 15 of them covered pandemics. Confirmatory testing is covered by 11 non-life insurers. Seven non-life insurers have reported 444 Covid-19 related claims.

MBA perspective on the pandemic

All 33 MBAs responded to the survey. Of the total number of MBAs, only six issue health insurance products. And only four of them cover pandemics. One MBA which excludes pandemics manifested that it will nonetheless cover pandemics in view of the Commission’s call to cover them.

HMO perspective on the pandemic

TWENTY-five out of 28 HMOs responded to the survey. Ten of those surveyed cover pandemics, subject to maximum limits. Confirmatory testing is covered by 11 HMOs. Fourteen HMOs have reported 2,514 Covid-19 related claims.


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