HMO profit jumps over 3-fold in H1

MANILA, Philippines — The net profit of the country’s health maintenance organizations (HMOs) jumped three-fold from January to June as more Filipinos recognized the importance of health protection amid the coronavirus pandemic, the Insurance Commission (IC) said yesterday.

Citing the unaudited interim financial statements submitted by 22 HMOs, Insurance Commissioner Dennis Funa said the industry booked a total net income of P4.53 billion from January to June, a strong 203 percent jump from the P1.49 billion recorded in the same period last year.

Funa said the growth may be attributed the increase in the industry’s revenues amid a 6.4-percent decline in expenses.

He said the HMO industry’s total revenues in the first semester grew by 6.7 percent to P25.64 billion compared to last year’s P24.03 billion.

“The trends that we have seen from the unaudited reports submitted by the HMOs reveal that Filipinos are increasingly recognizing the value of availing HMO products as part of health protection,” Funa said. “Perhaps now during this COVID-19 pandemic situation, more than ever, the importance of HMO products has been highlighted.”

Despite this, however, Funa said that 10 out of 22 companies have reported a decrease in their net income in the first half, ranging from 8.44 percent to 249.33 percent.

Meanwhile, Funa said the HMO industry’s total assets surged by 51.7 percent to P52.09 billion as of end-June from P34.34 billion last year.

Total liabilities also swelled by 50.2 percent to P40.85 billion from P27.19 billion in 2019, mainly due to lower collection of membership fees.

“This increase in the industry’s total liabilities is due to unearned membership fees, which constitutes 60.74 percent of such liabilities. It can be presumed that this is due to the difficulties encountered by the HMO industry in the collection of membership fees because of certain restrictions imposed by the national government in response to the COVID-19 pandemic,” Funa said.

On the other hand, the IC chief said total equity also jumped by 57.26 percent to P11.25 billion from P7.15 billion.

“The positive change in the industry’s equity may be attributed to the increase in retained earnings, which comprises 74.62 percent of the total equity,” he said.

However, the IC noted that the HMO industry’s total capital stock dropped by 5.3 percent to P2.65 billion from P2.8 billion last year.

Based on a survey conducted by the IC earlier, IC-regulated entities, including HMOs, insurance companies and mutual benefit associations paid out P258.8 billion in medical benefit claims from April 16 to May 8, 2020.11.23.

The IC said 89.4 percent or P231.36 million of this amount was paid by the HMO industry.