HEALTH maintenance organizations (HMOs) paid out 22.43% more healthcare benefits and claims in the first quarter versus the same period last year, putting a dent on their total earnings.

The Insurance Commission (IC) said in a statement on Tuesday that total benefits and claims paid by the HMO industry amounted to P9.48 billion in the first quarter, rising from the P7.74 billion seen in the same period in 2021, based on the unaudited interim financial statements submitted by 30 companies.

However, this increase in payouts caused their earnings to decline. HMOs’ total net income stood at P863.99 million, dropping by 44.61% from P1.56 billion a year ago.

“Accordingly, said growth in Healthcare Benefits and Claims paid resulted in a 15.90% increase in the industry’s Total Expenses including income tax in Q1 2022,” Insurance Commissioner Dennis B. Funa said in the statement.

Likewise, total assets went up by 4.6% to P69.62 billion from P66.56 billion a year earlier.

Mr. Funa said the increase in total assets was mostly driven by increases in the following accounts: Financial Assets at Fair Value through Profit or Loss (FVPL) (up 19%), Investment Property (14.24%) and Property and Equipment (13.48%), and Other Assets (79.39%)

Meanwhile, prepayments and total invested assets contracted to 23.45% and 1.36%, accordingly.

“Despite the year-on-year growth of the industry’s ‘Financial Assets at FVPL’ and ‘Investment Property,’ a huge decline by 52.50% in ‘Cash Equivalents’ was observed in Q1 2022 amounting to P3.6 billion; thus, the HMO industry’s Total Invested Assets decreased by 1.36%,” Mr. Funa said.

Meanwhile, the industry’s total equity and total liabilities all slightly grew in the first quarter of the year to 6.09% (to P16.06 billion) and 4.17% (P53.56 billion), respectively.

“The HMOs’ Total Equity increased from P15.14 billion in Q1 2021 to P16.06 billion in Q1 2022, primarily because of a 54.54% increase in the industry’s Total Capital Stock,” the IC said.

“Insofar as the growth in Total Liabilities from P51.42 billion in Q1 2021 to P53.56 billion in Q1 2022 is concerned, this is attributable to increases in ‘Notes Payable,’ ‘Administrative Services Only (ASO) Fund,’ and ‘Pension Obligation’ by 176.38%, 77.56%, and 45.55%, respectively, as well as a 187.03% increase in ‘Other Liabilities,’ year on year. ‘Unearned Membership Fees,’ which consists 41.88% of the Total Liabilities, increased 5.03% year on year.”

Revenues also went up 8.52% to P13.88 billion from the P12.79 billion last year, driven by higher proceeds from membership fees. — A.O.A. Tirona

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