HMO profits surge in first half to P4.53 billion

HEALTH MAINTENANCE organizations (HMOs) posted net profit growth of 203% in the first half to P4.53 billion due to cost-management measures as well as increased demand during the pandemic, the Insurance Commission (IC) said Monday.

“This may be explained by the 6.4% decrease in the industry’s total expenses against its increasing revenues,” Insurance Commissioner Dennis B. Funa said.

The industry total was compiled from the financial statements submitted by 22 HMOs, which seek to manage healthcare costs by referring clients to selected providers at agreed rates.

The industry reported revenue of P25.64 billion, up 6.7%.

The IC said more Filipinos signed up with HMOs as the coronavirus disease 2019 (COVID-19) outbreak amplified the need for health protection.

The insurance regulator said 10 companies reported profit declines of between 8.44% and 249.33%.

According to the IC, 84% of claims for medical benefits worth P231.36 million were paid out by HMOs during the public health emergency. It was citing a survey conducted between April 16 and May 8, which includes the weeks when the strictest lockdown rules were in force.

“The trends that we have seen from the unaudited reports submitted by the HMOs reveal that Filipinos are increasingly recognizing the value of availing of HMO products as part of health protection,” Mr. Funa said.

The industry’s assets grew 51.7% to P52.09 billion. Liabilities increased 50.2% to P40.85 billion.

“This is due to unearned membership fees, which constitute 60.74% of such liabilities. It can be presumed that this is due to the difficulties encountered by the HMO industry in collecting membership fees because of certain restrictions imposed by the national government in response to the COVID-19 pandemic,” Mr. Funa said. — Kathryn Kristina T. Jose