Half of all HMOs lost money last year
November 1, 2000 2 minutes read
Half of all HMOs lost money last year
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Half of the nation’s HMOs lost money last year, according to Weiss Ratings, an insurance rating firm based in Palm Beach Gardens, FL.
Despite total profits of $753.5 million by nation’s 34 largest HMOs, the overall industry reported losses of $186.6 million in 1999, according to Weiss.
"There is a very large and disturbing disparity between the profits of the few large HMOs and the continuing red ink in the rest of the industry,’’ said Weiss Ratings chairman Martin D. Weiss.
The smaller the HMO, the more likely it is to lose money, according to the firm. For instance, over 56% of HMOs with fewer than 100,000 members reported losses, vs. about 37% of HMOs with 250,000 to 500,000 members.
Among states with 10 or more HMOs reviewed, California HMOs collectively posted the largest overall profit, at $789.4 million. Other states in which HMOs reported overall profits include New York ($91.8 million) and New Jersey ($41.3 million).
States with the largest losses included Texas ($463 million), Massachusetts ($217.1 million), and North Carolina ($87.2 million).
Of the 540 HMOs that Weiss rated based on year-end 1999 data, 50 received rating upgrades, while 56 were downgraded.
Notable upgrades included Parker Benefits in West Virginia (from D to C), Alameda Alliance for Health in California (from C- to C+), and Amerigroup New Jersey Inc. (from D to C-).
Notable downgrades included Carelink Com-munity Health Partners in Delaware (from D to E-), Omnicare Health Plan in Michigan (from D- to E-), and HMO of Northeastern Pennsylvania Inc. (from B- to C-).
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