HMO Profits Drop 3.8%

In 2000, many big HMOs were profitable, but many small HMOs lost money. Last year, the smaller HMOs began to catch up with the bigger HMOs in terms of profitability, Weiss says.

But Weiss notes that the HMOs have increased their profits by increasing premiums and withdrawing from unprofitable markets. “More consumers are being forced to bear the burden of the industry’s recovery through rising health care costs and, in many cases, a reduction in coverage options,” Martin Weiss, chairman of the ratings firm, said in a statement about the HMO profit figures.