Health maintenance organization (HMO) Carehealth Plus Systems International has been placed under conservatorship by the Insurance Commission (IC) due to complaints of inability to provide claims.

The IC said in a statement Monday, April 8 that Carehealth will be put under conservatorship to protect the insurees and its policyholders as several complaints that the insurer was unable to provide benefits under its products.

When a company is under conservatorship, it continues to run normally with a conservator appointed by the IC overseeing its operations. It can still process and pay valid insurance claims, but it cannot sell new insurance policies. 

Existing insurance contracts issued before the conservatorship order will also stay valid, and the company must fulfill its obligations to policyholders until their policies end.

“Foregoing considered, the Commission finds Carehealth to be continually incapable of complying with the order of the IC to address the issues and concerns of the complainants against it,” IC Commissioner Rey Regalado said.

“The additional complaints against Carehealth even reveal that the HMO has not improved its services towards its members, nor has it paid its obligations with accredited healthcare providers,” he added.

To recall, Carehealth was issued a cease and desist order by IC in October last year to stop selling health insurance to the public immediately but was directed to continue servicing the health insurance claims of its existing policyholders.

Despite this, IC stated that it still received complaints from the insurees for Carehealth’s inability to service the benefits under their health insurance products and the reimbursement of expenses for covered medical procedures.

As per its Circular Letter No. 2019-35 dated 18 July 2019, IC may assign a conservator that shall take charge of assets, liabilities, and the management of the HMO if it is in a state of continuing inability or unwillingness to comply with its obligations under the law and its HMO policies issued to policyholders.

Carehealth has issued a motion to lift the cease and desist order, but the IC denied it in its Resolution dated April 3.

In the same Resolution, the IC also denied the HMO’s application for renewal of license, which had already been put on hold following the numerous complaints filed against them.

Based on the assessment of 27 HMOs, the total assets of all health insurers as of the third quarter last year stood at P60.6 billion with liabilities estimated at P50.4 billion, while equities were at P10.2 billion. Carehealth was no longer included in the list of HMOs.

IC data also showed that HMOs’ revenues during the fourth quarter increased to P66.8 billion from P57.4 billion in 2022 as the total healthcare benefits and claims reached P40.9 billion.