Sullano, Jekar Francis D.

JD-3A

PHILAMCARE HEALTH SYSTEMS, INC. vs. COURT OF APPEALS

G.R. No. 125678. March 18, 2002.
YNARES-SANTIAGO, J.:

FACTS:

Ernani Trinos applied for a health care coverage with Philamcare Health Systems, Inc and was
approved for the period of one year from March 1, 1998 to March 1, 1999. Under the agreement,
he was entitled to avail hospitalization whether ordinary or emergency. Upon termination of the
agreement, it was extended for another year from March 1, 1989 to March 1, 1990 and then,
from March 1, 1990 to June 1, 1990.

During the period of coverage, Ernani suffered a heart attack and was confined at the Manila
Medical Centre (MMC) for one month beginning March 1, 1990. While in the hospital, his wife
tried to claim the benefits under the health care agreement. Philamcare denied her claim saying
the agreement was void for concealment of Ernani’s medical history.

Ernani was discharged from MMC but was attended by a physical therapist at home. He was
later admitted at the Chinese General Hospital but due to financial difficulties, he was brought
home again. On April 13, 1990, Ernani had fever and was brought back to Chinese General
Hospital where he died the same day.

On July 24, 1990, Julia Trinos, wife of Ernani, instituted with the Regional Trial Court of Manila
an action for the reimbursement of her expenses and an action for damages against petitioner.
The RTC rendered judgement in favour of Julia.

On appeal, the Court of Appeals affirmed the decision of the trial court. Petitioner’s motion for
reconsideration was denied. Hence, this petition.

ISSUE:

1. Whether or not the agreement is a contract of insurance.

RULING:

1. Yes. The health care agreement was in the nature of non-life insurance, which is primarily a
contract of indemnity.

The law provides that contract of insurance as an agreement whereby one undertakes for a
consideration to indemnify another against loss, damage or liability arising from an unknown or
contingent event.
In addition, an insurance contract exists where the following elements concur:

(a) The insured has an insurable interest;

(b) The insured is subject to a risk of loss by the happening of the designated peril;
(c) The insurer assumes the risk;
(d) Such assumption of risk is part of a general scheme to distribute actual losses among a large
group of persons bearing a similar risk; and
(e) In consideration of the insurer’s promise, the insured pays a premium.

In the case at bar, the insurable interest of respondent’s husband in obtaining the health care
agreement was his own health. The health care agreement was in the nature of non-life
insurance, which is primarily a contract of indemnity. Once the member incurs hospital, medical
or any other expense arising from sickness, injury or other stipulated contingent, the health care
provider must pay for the same to the extent agreed upon under the contract.

Hence, payment should be made to the party who incurred the expenses. It is not controverted
that respondent paid all the hospital and medical expenses. She is therefore entitled to
reimbursement.

FORTUNE MEDICARE, INC vs. DAVID ROBERT U. AMORIN

G.R. No. 195872. March 12, 2014
REYES, J.
FACTS:

David Robert Amorin was a cardholder/member of Fortune Medicare, Inc. (Fortune Care). While
on vacation in Hawaii, Amorin underwent an emergency surgery, specifically appendectomy, at
St. Francis Medical Center, causing him to incur professional and hospitalization expenses of
$7,242.35 and $1,777.79, respectively. He attempted to recover from Fortune Care the full
amount thereof upon his return to Manila, but the company merely approved a reimbursement of
P12, 151, an amount that was based on the average cost of appendectomy if the procedure were
performed in an accredited hospital in Metro Manila. Amorin received the said amount under
protest, but asked for its adjustment to cover the total amount of professional fees which he had
paid, and 80% of the approved standard charges based on “American standard” considering that
the emergency procedure occurred in the US. To support his claim, Amorin cited Section 3, Art.
V on Benefits and Coverages of the Health Care Contract. Fortune Care denied the request
thereby prompting Amorin to file a complaint for breach of contract with damages. For its part,
Fortune Care argued that the Health Care Contract did not cover hospitalization costs and
professional fees incurred in foreign countries, as the contract’s operation was confined to
Philippine territory. The RTC dismissed Amorin’s complaint. Dissatisfied, Amorin appealed the
RTC decision to the CA. Subsequently, the CA rendered its decision granting the appeal, thereby
reversing and setting aside the trial court decision. Hence, the appeal. Fortune Care argues that
the phase “approved standard charges” did not automatically mean “Philippine Standard”

ISSUE:

1. Whether Fortune Medicare is liable under the policy given to Amorin.

RULLING:

1. Yes, Fortune Medicare is liable. In the policy, a provision stating that a member shall be
entitles to full coverage benefits whether in the Philippines or abroad. It also provides that if
the emergency confinement occurs in a foreign country, Fortune Medicare shall be obligated
to reimburse or pay 80% of the approved standard charges which shall cover the
hospitalization and professional fees.

For purposes of determining the liability of a health care provider to its members,
jurisprudence holds that a health care agreement is in the nature of non-life insurance, which
is primarily a contract of indemnity. Once the member incurs hospital, medical or any other
expense arising from sickness, injury or other stipulated contingent, the health care provider
must pay for the same to the extent agreed upon under the contract.

COMPARISON OF ABOVE TWO CASES.

The 2 cases above have the same ruling. It discussed the elements of a contract of Insurance and
why the element to “indemnify the injured party” is indispensable requisite. The two
jurisprudence dictates that a health care agreement is in the nature of non-life insurance, which is
primarily a contract of indemnity. The 1st case PHILAMCARE HEALTH SYSTEMS, INC.
vs. COURT OF APPEALS stated by the decision of the Supreme Court the health coverage
agreement entered upon by Ernani with Philamcare is a non-life insurance contract and is
covered by the Insurance Law. It is primarily a contract of indemnity. Once the member incurs
hospital, medical or any other expense arising from sickness, injury or other stipulated
contingent, the health care provider must pay for the same to the extent agreed upon under the
contract. The latter case FORTUNE MEDICARE, INC vs. DAVID ROBERT U. AMORIN
stated stated by the decision of the Supreme Court that purposes of determining the liability
of a health care provider to its members, a health care agreement is in the nature of non-life
insurance, which is primarily a contract of indemnity. Once the member incurs hospital, medical
or any other expense arising from sickness, injury or other stipulated contingent, the health care
provider must pay for the same to the extent agreed upon under the contract.