HMO profitability boosted by entry of gov’t workers
The local health maintenance organization (HMO) sector saw profits surge by more than 85 times in the first quarter, boosted by the government’s program that gave public sector workers medical allowance for the first time.
In a statement, the Insurance Commission (IC) said the HMO sector had netted P579.39 million in the three months through March, significantly higher than the P6.78 million bottom line recorded in the same period last year.
The figures were based on the financial statements submitted by 28 HMOs.
IC Commissioner Reynaldo Regalado said the HMO industry continued to ride the ongoing recovery from the COVID-19 crisis.
“This significant increase demonstrates the industry’s sustained recovery from the impact of the pandemic,” Regalado said.
“These statistical growths are not just mere numbers. They are reassuring indicators that the HMO industry continues to be a strong and reliable industry that affords Filipinos with health care security, ultimately uplifting Filipino lives,” he added.
The IC attributed the higher profits to the 26.15-percent increase in membership fees collected by HMOs. These cash inflows accounted for 97.52 percent of the industry’s total revenues during the first quarter.
Benefits for civil servants
The regulator said the growth in membership fees was stimulated by the granting of P7,000 medical allowance to each qualified government employee to avail of HMO coverage. It may be recalled that the government had allocated a total of P9.5 billion under the Miscellaneous Personnel Benefits Fund this year to fund the program.
This covers employees under national government agencies, state universities and colleges, as well as government-owned companies.
As a result, the membership fee reserves surged by 78.73 percent to P17.89 billion, increasing the resources that HMOs can use to meet their financial obligations and ensure the sustainability of their operations. Total liabilities, in turn, increased by 22.82 percent to P75.52 billion.
On the flip side, total expenses, including income taxes, went up by 20 percent to P22.41 billion on the back of a 17-percent increase in benefits and claims paid to sick members.
