Florida’s health maintenance organizations (HMOs) had a painfully unprofitable year in 2001, losing a total of $52.8 million, according to preliminary figures filed with the Florida Department of Insurance (DOI).
There is one bright spot in the HMOs’ fiscal performance: The collective loss of $52.8 million is approximately half the $99.5 million net loss posted by Florida HMOs in 2000.
The financial bleeding of 12 Florida HMOs has forced them to file corrective-action plans with Florida regulators, says Michelle Newell, division director of Insurer Services for the DOI.
The following 12 HMOs failed to earn an investment return of 2 percent on premiums collected, and thus have been required to detail to the DOI their efforts to achieve that minimum: AvMed Inc., Beacon Health Plan Inc., Capital Health Plan Inc., Florida 1st Health Plans Inc., Foundation Health, a Florida Health Plan, Health Plan Southeast Inc., Mayo Health Plan Inc., The Public Trust of Dade County, Total Health Choice Inc., United Healthcare Plans of Florida Inc., Vista Health Plan Inc., and Well Care HMO Inc.
Seventeen of the 32 HMOs operating in Florida posted a profit for 2001, but with the exception of Humana Medical Plan Inc.—which earned $51 million in net income for the year—net losses far outweighed the gains, according to the HMO Quarterly Summary dated December 31, 2001. The quarterly summary is based on unaudited figures submitted to the DOI by HMOs and is a far less rigorous assessment of their profitability than the annual fiscal reports due to be filed in April, says Newell.
The second-highest earner of the Florida HMOs, America’s Health Choice Medical Plans Inc., posted a profit of $7.4 million, followed by Physicians Health Care Plans Inc., which made $7.2 million in 2001.
By contrast, Prudential Health Care Plan Inc. posted a net loss of $31.9 million, United Healthcare lost $29.7 million, Aetna US Healthcare Inc., which bought Prudential Health, was out $20.2 million for the year, and CIGNA HealthCare of Florida Inc. lost $16.7 million.
Two other Florida HMOs, Foundation Health and Vista, posted net losses of more than $10 million, and only two of the remaining nine HMOs that lost money in 2001 lost less than $1 million.
Florida 1st and Vista both required cash injections of $1 million or more to maintain the surplus levels required by Florida law.
Brendan McKenna is a health care writer for Insure.com, the Consumer Insurance Guide.