WEISS RATINGSHMO Profits Skyrocket 162% in First Quarter 2002
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 $267 million, or 50 percent, to the industry's first-quarter profit increase.
HMOs reporting the largest increases in net income were:
|Net Income (Loss) ($Mil)|
|Kaiser Foundation Health Plan Inc.||Calif.||B-||55.9||17.0||38.9||228.5|
|Aetna Health Inc. (A PA Corp.)||Penn.||B-||15.3||(18.6)||33.9||182.3|
|Blue Cross of California||Calif.||A||106.8||76.0||30.8||40.5|
|Aetna Health Inc. (A New Jersey Corp.)||N.J.||B-||26.4||1.3||25.2||1,993.9|
|California Physicians Service||Calif.||A-||43.1||19.8||23.3||117.2|
|Aetna Health Inc. (A Texas Corp.)||Texas||C-||6.4||(14.8)||21.3||143.4|
|Aetna Health Inc. (An Arizona Corp.)||Ariz.||C-||14.4||0.4||14.0||3,544.7|
|Aetna Health Inc. (A New York Corp.)||N.Y.||C+||35.8||22.2||13.7||61.7|
|Blue Care Network of Michigan||Mich.||C+||(1.8)||(14.7)||12.9||87.8|
|Kaiser Foundation HP Northwest||Ore.||B||15.4||3.1||12.4||402.6|
|Compcare Health Services Ins. Corp.||Wis.||D+||10.8||(0.7)||11.5||1,737.5|
|Humana Medical Plan Inc.||Fla.||C||8.2||(1.7)||9.8||583.7|
|Health Net of New York Inc.||N.Y.||C-||5.9||(3.9)||9.8||251.5|
|Prudential Health Care Plan Inc.||Texas||C||1.6||(8.2)||9.8||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.
15430 Endeavour Drive, Jupiter, FL 33478 · (561) 627-3300 · www.weissratings.com