COVID payouts nearly halved HMOs’ bottom line in first half of 2021
MANILA, Philippines—A jump in COVID-19-related claims slashed health maintenance organizations’ (HMOs) bottom line by 42.5 percent to P2.6 billion in the first half of 2021, the Insurance Commission (IC) said on Tuesday (Nov. 2).
The latest IC data showed that the aggregate end-June net income of 30 HMOs fell from P4.5 billion during the first six months of 2020.
The HMO sector’s revenues from January to June declined 3.7 percent to P24.7 billion from P25.6 billion in 2020.
Insurance Commissioner Dennis Funa said lower first-half profit was due to the 15 percent increase—from P13.1 billion to P15.1 billion—in health care benefits and claims released by HMOs to clients.
“Add to this is the slight decrease (about 4 percent) in membership fees,” Funa added.
The industry group Association of Health Maintenance Organizations of the Philippines Inc. (AHMOPI) had explained that while its mostly corporate clients retained HMO memberships, the pandemic-induced economic slump weakened overall sales.
Funa told the Inquirer that for him, the drop in HMOs’ net income was “a display of [the industry’s] strong commitment to its clientele” amid the prolonged pandemic.
The HMO sector also continued to build its financial defenses with growth rates of 11.6 percent in assets (to P58.1 billion as of June), 15.9 percent in equity (to P13 billion), and 3.4 percent in capital stock (to P2.7 billion) during the first half of 2021, while liabilities also rose 10.5 percent year-on-year to P45.1 billion.
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