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  1. HMO Profits Skyrocket 162% in First Quarter 2002

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    PALM BEACH GARDENS, Fla., December 18, 2002 - The nation's HMOs recorded an $868.1 million profit for the first three months of 2002, representing a $536.6 million, or 162 percent, surge over the same period last year, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

    First-quarter industry profits were more widespread among the 441 HMOs studied by Weiss, with 73 percent reporting a profit during the period, compared to 60 percent of the plans reporting a profit during the same period in 2001. However, just three percent of the HMOs, or 14 companies, contributed $267 million, or 50 percent, to the industry's first-quarter profit increase.

    HMOs reporting the largest increases in net income were:

    Company:Kaiser Foundation Health Plan Inc.
    Domicile State:Calif.
    Weiss Safety Rating:B-
    Net Income (Loss) ($Mil) 1st Qtr 2002:55.9
    Net Income (Loss) ($Mil) 1st Qtr 2001:17.0
    $ Increase:38.9
    % Increase:228.5

    Company:Aetna Health Inc. (A PA Corp.)
    Domicile State:Penn.
    Weiss Safety Rating:B-
    Net Income (Loss) ($Mil) 1st Qtr 2002:15.3
    Net Income (Loss) ($Mil) 1st Qtr 2001:(18.6)
    $ Increase:33.9
    % Increase:182.3

    Company:Blue Cross of California
    Domicile State:Calif.
    Weiss Safety Rating:A
    Net Income (Loss) ($Mil) 1st Qtr 2002:106.8
    Net Income (Loss) ($Mil) 1st Qtr 2001:76.0
    $ Increase:30.8
    % Increase:40.5

    Company:Aetna Health Inc. (A New Jersey Corp.)
    Domicile State:N.J.
    Weiss Safety Rating:B-
    Net Income (Loss) ($Mil) 1st Qtr 2002:26.4
    Net Income (Loss) ($Mil) 1st Qtr 2001:1.3
    $ Increase:25.2
    % Increase:1,993.9

    Company:California Physicians Service
    Domicile State:Calif.
    Weiss Safety Rating:A-
    Net Income (Loss) ($Mil) 1st Qtr 2002:43.1
    Net Income (Loss) ($Mil) 1st Qtr 2001:19.8
    $ Increase:23.3
    % Increase:117.2

    Company:Aetna Health Inc. (A Texas Corp.)
    Domicile State:Texas
    Weiss Safety Rating:C-
    Net Income (Loss) ($Mil) 1st Qtr 2002:6.4
    Net Income (Loss) ($Mil) 1st Qtr 2001:(14.8)
    $ Increase:21.3
    % Increase:143.4

    Company:Aetna Health Inc. (An Arizona Corp.)
    Domicile State:Ariz.
    Weiss Safety Rating:C-
    Net Income (Loss) ($Mil) 1st Qtr 2002:14.4
    Net Income (Loss) ($Mil) 1st Qtr 2001:0.4
    $ Increase:14.0
    % Increase:3,544.7

    Company:Aetna Health Inc. (A New York Corp.)
    Domicile State:N.Y.
    Weiss Safety Rating:C+
    Net Income (Loss) ($Mil) 1st Qtr 2002:35.8
    Net Income (Loss) ($Mil) 1st Qtr 2001:22.2
    $ Increase:13.7
    % Increase:61.7

    Company:Blue Care Network of Michigan
    Domicile State:Mich.
    Weiss Safety Rating:C+
    Net Income (Loss) ($Mil) 1st Qtr 2002:(1.8)
    Net Income (Loss) ($Mil) 1st Qtr 2001:(14.7)
    $ Increase:12.9
    % Increase:87.8

    Company:Kaiser Foundation HP Northwest
    Domicile State:Ore.
    Weiss Safety Rating:B
    Net Income (Loss) ($Mil) 1st Qtr 2002:15.4
    Net Income (Loss) ($Mil) 1st Qtr 2001:3.1
    $ Increase:12.4
    % Increase:402.6

    Company:Compcare Health Services Ins. Corp.
    Domicile State:Wis.
    Weiss Safety Rating:D+
    Net Income (Loss) ($Mil) 1st Qtr 2002:10.8
    Net Income (Loss) ($Mil) 1st Qtr 2001:(0.7)
    $ Increase:11.5
    % Increase:1,737.5

    Company:Humana Medical Plan Inc.
    Domicile State:Fla.
    Weiss Safety Rating:C
    Net Income (Loss) ($Mil) 1st Qtr 2002:8.2
    Net Income (Loss) ($Mil) 1st Qtr 2001:(1.7)
    $ Increase:9.8
    % Increase:583.7

    Company:Health Net of New York Inc.
    Domicile State:N.Y.
    Weiss Safety Rating:C-
    Net Income (Loss) ($Mil) 1st Qtr 2002:5.9
    Net Income (Loss) ($Mil) 1st Qtr 2001:(3.9)
    $ Increase:9.8
    % Increase:251.5

    Company:Prudential Health Care Plan Inc.
    Domicile State:Texas
    Weiss Safety Rating:C
    Net Income (Loss) ($Mil) 1st Qtr 2002:1.6
    Net Income (Loss) ($Mil) 1st Qtr 2001:(8.2)
    $ Increase:9.8
    % Increase:119.4

    Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak

    "Premium rate increases, insurer consolidation, and elimination of unprofitable subsidiaries continue to boost industry earnings," commented Melissa Gannon, vice president of Weiss Ratings, Inc. "The other side of the coin is that consumers have been straddled with rising healthcare costs and, in many cases, reduced services, a trend likely to continue."

    Notable Upgrades and Downgrades

    Of the 405 HMOs rated based on an analysis of first-quarter 2002 data, Weiss upgraded the following:

    MVP Health Plan, Inc. (N.Y.) from C+ to B-
    Pacificare of Arizona, Inc. (Ariz.) from C+ to B-
    Unicare Health Plans of Texas, Inc. (Texas) from D+ to C-
    Healthplan of Texas, Inc. (Texas) from D- to D+
    Amerigroup Texas, Inc. (Texas) from D to D+
    Carelink Health Plans, Inc. (W. Va.) from D- to D

    Companies downgraded were:

    Aetna Health Inc. (An Oklahoma Corp.) from C- to D
    Coventry Health Care of Kansas, Inc. (Kan.) from C to C-
    Humana Health Plan, Inc. (Ky.) from C+ to C

    The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies, and risk diversification.

    Weiss issues safety ratings on more than 15,000 financial institutions, including life and health insurers, HMOs, Blue Cross Blue Shield plans, property and casualty insurers, banks, and brokers. Weiss also rates the risk-adjusted performance of more than 11,000 mutual funds and 7,000 stocks. Weiss Ratings is the only major rating agency that receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, and libraries.

    Consumers needing more information on the financial safety of a specific company can purchase a rating and summary analysis for as little as $7.95 through www.WeissRatings.com, or starting at $15 by calling (800)-289-9222.
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  2. 5 Comments

  3. by   RN2B2005
    News Flash: Insurers Are Businesses, Businesses Make Money

    Insurers, even HMOs, aren't evil. They exist because there is a demand for their services--employers and individuals who want lower cost healthcare and are willing to accept limitations on access to care.

    No-one was ever forced at gunpoint to sign up for an HMO, and don't give me stories about the poor kids with leukemia/heart disease/whatever...their parents KNEW (or should have known) when they signed up for the plan that bone marrow transplants/heart transplants/whatever weren't covered. The contract between an insurer and the insured is a BUSINESS contract, and thus the business can be expected to take any measures necessary to protect their assets.

    I, for one, am glad to see that these companies are turning a profit. I'm also glad that I had the sense to read my benefits booklet, and the money to choose an insurer that makes money and provides all of the benefits stipulated to in the benefits booklet.
  4. by   Sally_ICURN
    Originally posted by RN2B2005
    No-one was ever forced at gunpoint to sign up for an HMO, and don't give me stories about the poor kids with leukemia/heart disease/whatever...their parents KNEW (or should have known) when they signed up for the plan that bone marrow transplants/heart transplants/whatever weren't covered. The contract between an insurer and the insured is a BUSINESS contract, and thus the business can be expected to take any measures necessary to protect their assets.
    Um, hello? People don't always have the advantage of knowing ahead of time that they or a family member will need a heart transplant, or a specialist, or a CTscan, or a freakin' perscription drug. And as far as people being forced at gunpoint? A large number of people in this country are not insured. It's more like they put up with what they can get if it's offered, and then end up fighting for what is rightfully due them.

    I believe HMOs/Managed Care companies ARE evil and they don't give a crap about an enrollees health. They only care about the bottom (fiscal) line. You better believe they are going to protect their assets, at the expense of human life or the quality thereof.

    This topic is far more complicated than a "business contract."

    ~Sally
  5. by   OC_An Khe
    Not everyone has a choice about what health plan or HMO is available to them. You get what your employer makes available to you....of course you could always change employers and when you do tell them why.
    The cost of health insurance is sky rocketing again, so expect less coverage and higher individual costs in the future.
  6. by   burntnurse
    yes you are lucky that you have the money to put in fatcat's pocket. i think it is immoral for anyone to make a profit by gouching consumers. i feel the same way about for profit hospitals and nursing homes. there are many people suffering and dying because of lack of affordable health insurance, but i'm glad you sleep well.
  7. by   LasVegasRN
    Originally posted by Sally_ICURN
    ...I believe HMOs/Managed Care companies ARE evil and they don't give a crap about an enrollees health. They only care about the bottom (fiscal) line. You better believe they are going to protect their assets, at the expense of human life or the quality thereof....
    That's insurance in a nutshell. You are just a number and a plan accesser, that's all.

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