Highly unequal access to health services and the large share of household out-of-pocket spendingin total health expenditures underscore the importance of attaining universal health coverage.This study evaluates the major challenges involved in moving toward universal coverage of thePhilippine National Health Insurance Program. The strategic approach of PhilHealth inexpanding population coverage has been described as “squeezing the middle”: (i) “squeezingfrom the top” by expanding the PhilHealth coverage of the group subject to compulsoryenrollment, i.e., the Employed Sector Program, (ii) “squeezing from the bottom” by expandingthe coverage of the poor households under the Sponsored Program, and (iii) implementinginterventions that are directed at expanding the coverage of non-poor households whose headsare employed in the informal sector under the Individually Paying Program. Recently, government decided that the national government counterpart in the premiumcontributions of members enrolled in the Sponsored Program will only be available for familiesidentified as poor under the National Household Targeting System for Poverty Reduction(NHTS-PR). This decision is anchored on the expectation that the use of the NHTS-PR willimprove the targeting performance of the Sponsored Program largely by enabling thegovernment to eliminate political intervention in the selection process. While this new policy direction helps promote better targeting of the national governmentsubsidy, it presents distinct challenges to the PhilHealth in moving towards universal coverage.First, ensuring the enrollment in the program of all the households identified under the NHTS-PR is a major hurdle considering that the selection and enrollment of Sponsored Programbeneficiaries are largely initiated by the LGUs and considering the extent of political patronageinvolved in the process. Second, ensuring the continued enrollment in PhilHealth of some 5.1million households who were enrolled in the Sponsored Program in 2010 but who are not in theNHTS-PR list of poor households even if they are no longer qualified for the nationalgovernment subsidy is another major challenge. The analysis suggests that broadening population coverage of social health insurance programmay be difficult to achieve without concomitant reforms in other elements of the program,particularly the payment mechanism