Are HMO medical plans endangered institutions?

According to recent evaluations and ratings, HMOs are classified as endangered institutions. Many HMO plans suffer from financial problems and do not meet the necessary requirements that a proper medical plan should have, according to the National Association of Insurance Commissioners (NAIC).

Weiss Ratings examined the financial condition of HMO plans and also examined whether or not HMOs met the required standards that proper medical plans should have. Here are the HMO plans that did not meet the NAIC capital guidelines, according to Weiss:

• Bluegrass Family Health Inc. (Kentucky)

• Community Health Choice Inc. (Texas)

• Grand Valley Health Plan Inc. (Michigan)

• Harris Methodist Texas Health Plan (Texas)

• Health New England Inc. (Massachusetts)

• Health Options Connecticut Inc. (Florida)

• Healthcare Oklahoma Inc. (Oklahoma)

• HUM Healthcare Systems Inc. (New York)

• Sun Health Medisun Inc. (Arizona)

• Wellcare of Connecticut (Connecticut)

• Yellowstone Community Health Plan (Montana)

Martin Weiss, chairman of Weiss Ratings, claims, “Among all the industries we rate, including banks, insurers, and brokerage firms, HMOs have the largest percentage of endangered institutions. What's worrisome is that these financial pressures can sometimes impinge upon the quality of care afforded to consumers, or, in a failure, potentially leave them stranded.”

HMO analyst Donna O'Rourke, claims, “We based these ratings on just the first quarter's data. Once we have more data for the year, we can get a better idea of how they are doing.”

Many health insurance consumers focus on one main factor when wanting to purchase a health insurance policy – the price. They don’t’ always look on the ratings of many HMO plans.

As a matter of fact, many consumers want to cancel their policies because they aren’t satisfied with their HMO health care plans. Before purchasing a policy with an HMO or any other health care plan, keep in mind that it would be a smart idea to check the rating before making any final decisions.