THE health maintenance organization (HMO) industry’s profits surged 465% to P7.12 billion in 2020, with patient deferment of medical procedures outweighing the added expense of treating coronavirus victims, the Insurance Commission said.

Insurance Commissioner Dennis B. Funa said Monday that based on the industry’s unaudited financial statements, expenses of 25 out of 29 HMOs that have submitted their accounts dropped 10.2%, while revenue rose 1.4% to P52.29 billion.

“It should be pointed out, though, that the HMOs have shouldered a significant amount of the COVID-19 private medical expenses,” Mr. Funa said.

“The figures we are seeing now reflect the temporary changes in the behavior of the general public. It appears that people are deferring or postponing, if they can, medical procedures. But definitely this is just temporary. When the opportunity affords, people will have their medical check-ups and procedures,” he added.

He said seven HMOs experienced declining profits of between 23% and 730%. He did not identify the companies.

The industry’s assets grew 37.53% to P59.25 billion in 2020, while liabilities grew 28% to P45.53 billion.

“It will be noted that 33.13% of the total liabilities were unearned membership fees, which refer to fees paid in advance to the HMO industry for services not yet provided,” the regulator said.

Equity in HMOs totaled P13.72 billion in 2020, up 82.7%, following a 59% rise in retained earnings.

Mr. Funa said the financial results reflect growing awareness of HMO products and their value.

“Perhaps now during this COVID-19 pandemic, more than ever, the importance of HMO products has been highlighted… The increase in the HMO industry’s total revenue is mainly driven by its continuously growing total membership, or enrollees’ fees, which comprise 97.12% of the industry’s total revenue,” he added.

The HMO segment outperformed the insurance industry overall, with life insurers, non-life insurance companies and mutual benefit associations reporting a combined net profit of P41.24 billion in 2020, down 8.6%. — Beatrice M. Laforga