The nation's HMOs reported an 81% jump in collective net earnings last year, thanks in large part to growing profitability in their Medicare+Choice lines, according to Weiss Ratings, Jupiter, Fla. Total combined profits in 2002 reached $5.5 billion, up from $3 billion the year before, as HMOs raised premiums and cut costs. Meanwhile, earnings from HMOs' Medicare businesses jumped 118% to $1 billion from $462.9 million in 2001, as plans exited money-losing markets and enjoyed higher government reimbursement, Weiss said. HMOs' profits from Medigap sales also rose -- by 91% to $270.5 million -- as plans capitalized on seniors' growing need for supplemental Medicare insurance. Of the 544 HMOs studied, only 25% reported a loss in 2002, down from 37% in 2001. Nearly 71% of HMOs with fewer than 100,000 enrollees reported a profit last year, up from 56% in 2001 and 49% in 2000. -- by Laura B. Benko
HMOs' profits soar, reflecting Medicare gains
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