HMO profits soar to P1.56 billion in Q1

MANILA, Philippines — The health maintenance organization (HMO) industry nearly doubled its profit to P1.56 billion in the first quarter as benefits and claims received by members declined by double digits.

According to the Insurance Commission (IC), the industry’s net income jumped by 96 percent in the first quarter from P797.7 million a year ago.

During the period, HMOs suffered an almost three percent drop in revenue to P12.79 billion as they brought down membership and enrollment fees to encourage Filipinos to buy health insurance plans.

On the other hand, benefits and claims released by HMOs fell by over 15 percent to P7.6 billion. Overall, the industry tightened its belt in the first quarter by slashing its expenses by nine percent, mitigating the decrease in revenue and driving profit growth.

Further, HMO equity ballooned by around 94 percent to P15.14 billion, thanks to an increase in retained earnings. The IC reported that retained earnings accounted for 78 percent of equity owned by the industry.

Broken down, assets handled by HMOs expanded by almost 32 percent to P66.56 billion, while liabilities went up by more than 20 percent to P51.42 billion.

According to the IC, cash and cash equivalents managed by HMOs grew by over half, enlarging their asset base in the first quarter.

Insurance Commissioner Dennis Funa said the pandemic proved how valuable the industry is to the economy with the services HMOs deliver to their clients.

Firms regulated by the IC have issued P8.25 billion in COVID-19 claims from January 2020 to June 2021. HMOs accounted for over 48 percent of the total at P3.98 billion, exceeding the payouts extended by life insurers (P3.44 billion), mutual benefit associations (P546.6 million) and non-life insurers (P279.3 million).

For the first semester, HMOs and insurers granted P4.35 billion in COVID benefits to their policy holders. HMOs took the largest share of the amount at P2.06 billion, followed by life insurers (P1.98 billion), MBAs (191.7 million) and non-life insurers (P119.1 million).

“As the IC has envisioned, the HMO industry has increasingly become a pillar of the Philippine economy serving our fellow Filipinos, especially during the pandemic,” Funa said.

HMOs used to be regulated and monitored by the Department of Health prior to the issuance of Executive Order 192, series of 2015, transferring the oversight to the IC.