Commercial Premium Increasing Among New England HMOs.KENNEBUNK, Maine--(BW HealthWire)--Aug. 30, 1999-- An assessment of commercial HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, premium per member per month(pmpm) reaffirms that New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. rates are on the increase. As New England HMOs held rates and focused on enrollment growth, the average year-to-date commercial premium was only $136 in December 1997. The average commercial premium pmpm increased to $144 by December 1998, suggesting that commercial rates increased an average of 6 percent last year. Considering 1998 combined expenses for commercial and government business averaged $175 pmpm, New England HMOs will continue raising commercial rates throughout 1999 to bolster This article is about the pillow called a bolster. For other meanings of the word "bolster", see bolster (disambiguation). A bolster (etymology: Middle English, derived from Old English, and before that the Germanic word bulgstraz their bottom lines. Industry experts predicted HMO rate hikes between 7 and 10 percent this year. An average 7 percent increase among New England HMOs would increase the average commercial rate to $154 pmpm. Analysts expect premium increases will return many HMOs to profitability in 1999. The average premium across all lines of HMO business in New England was $155 pmpm as of December 1998. Considering Medicare and Medicaid Medicare and Medicaid U.S. government programs in effect since 1966. Medicare covers most people 65 or older and those with long-term disabilities. Part A, a hospital insurance plan, also pays for home health visits and hospice care. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates vary by state and county, the region's average Medicare HMO premium pmpm was $408 in 1998. The average Medicaid managed care premium pmpm was $140. The unfavorable gap between premium income and HMO expenses had not narrowed as of December 1998. Average HMO premium of $155 did not offset average expenses of $175 and 67 percent of New England's HMOs reported losses for the year. The region's median medical loss ratio was 90.14 percent as medical expenses averaged $144 pmpm. Administrative expense pmpm averaged $30 as the median administrative expense ratio was 15.25 percent. New England HMO financial performance overall had worsened through December 1998. In spite of investment income earned that offset losses for many of the larger managed care organizations, the median profit margin was -2.85 percent. The median operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , which reflects underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. losses without investment income, was -5.52 percent. The current release of the New England HMO Monitor is available for $180. For more information or to request a complimentary chart of 1998 HMO enrollment contact Mark Farrah Associates (207)985-8484 or email mfa@markfarrah.com. |
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