The Insurance Commission stated that most health maintenance organization (HMO) providers are expected to meet the planned increase of P100 million in minimum capital requirements, but seven others will be affected.

On the sidelines of the 74th anniversary of the Philippine Life Insurance Association, Insurance Commissioner Reynaldo Regalado said that this move will ensure that people are “reasonably covered.”

“We studied naman eh, kung ilan lang yung talagang parang tatamaan. Ang una kong naalala is something like seven providers. Meron namang proper yung kanilang procedure. Maliit lang yung cinocover,” Regalado told reporters.

[We studied to see how many would really be affected. The first thing I remembered is something like seven providers. They have proper procedures. They only cover a small portion.]

He also noted that the P10 billion allocation for the HMOs of government employees for next year is not enough, withstanding the current P10 million minimum paid-up capitalization.

“That points to about P7,000 ang computation ko eh per covered person.
So ganun namin kasupportive sa HMO. But it's too small for this kind of coverage for our people, P10 million lang yung capitalization,” he said.

[That points to about P7,000 in my computation per covered person. That's how supportive we are of HMO. But it's too small for this kind of coverage for our people, only P10 million in capitalization.]

The IC earlier issued a draft circular inviting public consultation on revising the rules and regulations governing the minimum capitalization and financial capacity requirements for HMOs.

Under this proposal, the capital base for HMOs will be increased to P50 million for existing domestic HMOs by year-end and to P100 million by the end of 2025 – matching the requirement for new HMOs.

Currently, existing domestic HMOs must have a minimum paid-up capital of at least P10 million. By the end of 2025, this will be raised again to P100 million for both existing and new HMOs.

Following this, minimum paid-up capital will further increase to P200 million by 2028, P350 million by 2031, and P500 million by 2034.

Community-based and cooperative HMOs are required to maintain paid-up capital equivalent to 50 percent of that prescribed for a regular HMO.

The IC commissioner emphasized that HMO providers that may not comply with the possible capital increase may merge with other providers.

“Maraming ways we will help them on this maybe they can merge,  those are the options that we would like. The adjustment has to be clearly set out,” he said.

The new proposal also seeks the increase of annual supervision fees to P100,000 for gross membership fees of up to P10 million and P500,000 for those over P50 million.

The IC also proposed to raise the security deposit requirement from 20 percent to 25 percent of the actual paid-up capital from the previous year.