The health maintenance organization (HMO) industry has returned to profitability for the first time in the post-pandemic era, the Insurance Commission (IC) said.

In a statement, the IC reported that the HMO sector posted a net income of P6.8 million from January to March 2024, a reversal of the P319 million loss incurred in the same period last year.

The surge in net income was driven by higher revenues, even in the face of the hefty healthcare benefit payouts, which jumped 17.3 percent to P15.05 billion from P12.83 billion.

The latest figure is also higher by 6.26 percent compared to P17.47 billion paid-out benefits in the last quarter of 2023.

“Despite the big increase in the payout of healthcare benefits, which is considered as expenses in the accounting records of HMOs, HMOs returned to profitability in the first quarter due to higher revenues,” the IC said. 

The HMOs’ total revenues also increased by 20 percent to P18.68 billion from P15.55 billion a year ago.

“The Insurance Commission attributed the big increase in revenues of the HMO industry to the increase in collection of membership fees, which amounted to P17.78 billion during the 1st quarter,” the commission said.

Likewise, total assets improved 10.7 percent to P71.31  billion from P64.78 billion a year earlier.

Meanwhile, total capital stock and total invested assets swelled by 43.9 percent and 4.47 percent to P8 billion and P18.48 billion, respectively.

On the other hand, the industry’s total equity dropped in the first quarter of the year to 16.96 percent (to P9.8 billion) due to the decline in retained earnings by 85.33 percent or by P5.31 billion.

Total liabilities increased to 16.11 percent (P61.49 billion) which could be attributed to the significant increases of 15.96 percent in membership fee reserves and 51.57 percent in claims reserves.