HEALTH maintenance organizations (HMOs) saw their industry-wide net income tripling to P4.53 billion during the first half of the year amid the pandemic, according to the Insurance Commission (IC).
The IC said on Monday the industry’s total net income grew by a staggering 203.41 percent from only P1.49 billion in the same period last year based on unaudited interim financial statements submitted by 22 HMOs.
“Based on these unaudited reports, the HMO industry’s total net income jumped from P1.49 billion as of 30 June 2019 [“2Q 2019”] to P4.53 billion as of 2Q 2020. This may be explained by the 6.4-percent decrease in the industry’s total expenses against its increasing revenues,” Insurance Commissioner Dennis Funa said in a statement.
“Notwithstanding this, however, 10 companies reported a decrease in their net income ranging from 8.44 percent to 249.33 percent,” Funa added.
The IC also observed upward trends in the industry’s total assets, total liabilities, total equity and total revenues.
For the first half of this year, total HMO industry assets surged by 51.7 percent to P52.09 billion from P34.34 billion in the same period a year ago.
On the other hand, its total liabilities this year also jumped by 50.2 percent to P40.85 billion from P27.19 billion from January to June last year.
“This increase in the industry’s total liabilities is due to unearned membership fees, which constitute 60.74 percent of such liabilities. It can be presumed that this is due to the difficulties encountered by the HMO industry in the collection of membership fees because of certain restrictions imposed by the National Government in response to the Covid-19 pandemic,” Funa said.
Revenues climb
For the first six months of the year, the industry’s total revenues also climbed by 6.7 percent to P25.64 billion from P24.03 billion last year.
Apart from this, the total equity of the HMO industry for the same period also soared by 57.26 percent to P11.25 billion this year from P7.15 billion in 2019.
“The positive change in the industry’s equity may be attributed to the increase in retained earnings, which comprises 74.62 percent of the total equity. However, it should also be noted that the HMO industry’s capital stock decreased by 5.3 percent year-on-year, from P2.80 billion as of 2Q 2019 to P2.65 billion as of 2Q 2020,” Funa said.
Nonetheless, Funa said these reports submitted by the HMOs reveal that Filipinos are increasingly recognizing the value of availing HMO products as part of health protection.
“Perhaps now during this Covid-19 pandemic situation, more than ever, the importance of HMO products has been highlighted especially that, according to a survey conducted by this Commission from 16 April to 8 May 2020, 89.4 percent of Medical Benefits claims paid during said period was paid by the HMO industry, amounting to P231.36 million out of the P258.8 million total Medical Benefits claims paid,” Funa said.