In 1995, the Philippines government legislated to create an income-rated and predominantly employment-based universal health insurance program over a 15-year period. The program was intended to provide more and better health care than was available through a combination of existing insurance schemes that covered less than half of the population, and partially subsidised services provided by government facilities and funded from general taxation. The legislation was well intentioned, and the program has some skilful and imaginative staff. However, there are significant barriers to success including low average and widely dispersed incomes, improving but still unsatisfactory health status, weak government health care services, and the sometimes negative impact of for-profit agencies. We review progress to date and conclude that, although membership numbers and benefit rates have increased, access is still inadequate and copayments are high. We argue that strong and innovative steps are needed if the Program’s goals are to be realised. In particular, we suggest that the focus should be on more formal and explicit rationing that takes account of cost per quality-adjusted life-year; and radical adjustment of financial incentives for care providers including capitation and per case payment based on costed clinical pathways for high-volume case types. Finally, we comment briefly on lessons that might be learned by both The Philippines and Australia.