The total income of the health maintenance organizations’ (HMO) industry dropped by 23.76 percent to P1.26 billion in 2019 from P1.65 billion in 2018.
The Insurance Commission (IC) said on Thursday that the decline in the total income of the industry last year can be attributed to the increase in health benefits and claims paid by the industry, which is 76.34 percent of the industry’s total expenses vis-à-vis the industry’s increasing revenues.
Citing data from the unaudited interim financial reports submitted by HMOs, the IC said in a statement that the industry’s total revenues in 2019 jumped by 13.83 percent to P51.56 billion from the previous year’s P45.30 billion due to the industry’s growing total membership or enrollees’ fees that account for 96.91 percent of the total revenues.
Moreover, IC Commissioner Dennis B. Funa said the HMO industry’s total asset base grew by 10.58 percent to P43.08 billion from P38.96 billion. Of the total asset base, 46.38 percent consists of cash and cash equivalents.
On the other hand, the industry’s total liabilities also rose by 9.70 percent to P35.57 billion from P32.43 billion in 2018. Unearned membership fees comprised 39.26 percent of the total liabilities.
Notwithstanding the increase in liabilities, an upward trend in total equity was also observed as it grew by 14.95 percent to P7.51 billion from P6.53 billion.
According to Commissioner Funa, “the upward trend in the HMO industry’s equity could be attributed to an increase in the industry’s aggregate capital stock, which consisted of 38.08 percent of the industry’s total equity.”
“Remarkably, not only did it contribute to the industry’s equity, the industry’s capital stock actually expanded by 4.49 percent from P2.74 billion as of 4Q [the fourth quarter of] 2018 to P2.86 billion as of 4Q 2019, according to the interim reports,” he added.
However, Funa also pointed out that the statistics mentioned were obtained before the onset of the community quarantine due to Covid-19.
“The [Insurance] Commission is hopeful that the economic and financial impact of the pandemic in the succeeding reporting quarter will, to a certain degree, be mitigated by the measures in the various Covid-related Circular Letters that we have issued,” Funa added.