PCC, IC improve alliance to address HMO concerns

CEBU, Philippines — The Philippine Competition Commission (PCC) is strengthening its collaboration with the Insurance Commission (IC) to address concerns faced by players, particularly the Health Maintenance Organization (HMO) industry.

PCC recently convened a strategic policy dialogue with IC to discuss the findings of its 2023 rapid market study on the HMO sector.

The findings of the study highlighted competition concerns such as potential barriers to entry for new HMO entrants and the greater tax and regulatory requirements faced by HMOs compared to insurance companies offering HMO-like products.

During the dialogue, IC representatives shared the agency’s regulatory framework and insights on the competitive landscape of the HMO and insurance industry. They discussed IC’s current efforts to monitor the competitive landscape of the HMO industry, as well as its ongoing review, through ex-post studies, of its policies.

The dialogue concluded with the PCC and the IC agreeing to strengthen collaboration to better monitor and ensure healthy competition in the HMO industry.

The PCC conducts strategic policy dialogues to address competition policy issues in various sectors, aiming to assess the competitive implications of regulatory frameworks and propose recommendations to enhance market competition and economic efficiency.

In 2023, the HMO industry suffered a bigger net loss of P4.3 billion, marking the second straight year of a weak bottom line, as benefits and claims by its members soared.

Latest data from IC showed that the HMO sector incurred a net loss of P4.27 billion in 2023, a three-fold increase from the P1.43 billion loss a year ago.

This developed even as revenues improved by 16 percent to P66.89 billion as the industry increased its membership fees, which comprised 97 percent of the sector’s total revenues.

Last year’s net loss was attributed to the higher benefits and claims released by 27 HMO firms covered in the report, which jumped by 26 percent to P55.46 billion from P43.93 billion in 2022.

HMOs also reported increases in administrative and commission expenses by 19.72 percent and 10.27 percent, respectively.

Fourteen of the 27 HMO firms incurred net losses led by Medicard Philippines Inc. with P2.63 billion. Medicard released the third most number of benefits and claims last year at P9.14 billion.

Maxicare Healthcare Corp. also recorded a P775.66 million loss in bottomline after disbursing P22.17 billion in benefits and claims, the highest among HMOs.

Other HMO firms that suffered losses include Intellicare, Carewell Health Systems Inc., Getwell Health Systems Inc., Medocare Health Systems Inc., MetroCare Health Systems Inc., Pacific Cross Health Care Inc., and Value Care Health System Inc.

Also included are Forticare Health Systems International Inc., Health Care and Development Corp. of the Philippines, Health Delivery System Inc., Insular Health Care Inc., and Optimum Medical and Health Care.