MANILA, Philippines — Health maintenance organizations (HMO) returned to profitability in the first quarter of 2024 despite spending on hefty benefit payouts during the period, the Insurance Commission (IC) reported on Monday.
Data released by the IC showed HMOs netted P6.8 million in the first three months of the year, a reversal from the P319-million net loss recorded in the same period in 2023. The regulator compiled the financial statements of 24 HMO firms for the industry report.
HMOs pulled off such a financial performance despite a big increase in payouts of healthcare benefits, which are considered expenses in the accounting records of these companies.
Figures from the regulator showed HMOs disbursed P15.05 billion in benefits in the first quarter, marking a 17.3-percent increase year-on-year.
What helped HMOs return to profitability was their fatter revenues, which jumped by 10 percent to P18.68 billion. The IC said membership fees amounted to P17.78 billion in the first quarter, up by 17.44 percent and contributing the most to the healthy top-line growth.
Asset growth
Overall, the regulator said the HMO industry’s total assets grew by 10.07 percent to P71.31 billion in the January-March period.
At the same time, total liabilities also rose by 16.11 percent to P61.49 billion, which the IC attributed to the “significant” 15.96-percent increase in membership fee reserves and 51.57-percent spike in claims reserves.
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Total capital stock likewise jumped by 43.90 percent to P8.1 billion while invested assets went up by 4.47 percent to P18.5 billion. However, total equity declined by 16.96 percent to P9.8 billion due to a drop in retained earnings by 85.33 percent.