Net profits at the nation's HMOs rose 21% to $6.98 billion in the first half of 2005, as premium increases continued to level off and insurers became more financially stable, according to a report by Weiss Ratings. That compared with a 32% earnings gain in the first half of 2004, to $5.76 billion, and a 73% gain in the first half of 2003, to $4.37 billion. Not-for-profit Horizon Blue Cross Blue Shield of New Jersey saw the largest profit increase, earning $137 million in the first half of 2005, up 263% from $37.8 million a year earlier. Based on the data, Weiss upgraded its ratings for 76 of the 503 HMOs it review and downgraded 12. "Despite a slowdown in earnings growth, industry profitability remains strong," Weiss Ratings Vice President Melissa Gannon said in a news release. "With premium rate increases leveling off, insurers will look for more innovative cost-control measures to remain competitive and financially secure." -- by Laura B. Benko
HMOs see slower, but still strong, profit growth
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