|[January 20, 2014]
A.M. Best Special Report: Health/HMO Impairments Decline As Financial Standards Tighten
OLDWICK, N.J. --(Business Wire)--
Over the five years through December 2013, 20 health insurers or health
maintenance organizations (HMOs) are known to have become financially
impaired, with the number of impairments following a generally declining
trend from year to year, according to A.M. Best Co.'s review of
the most recent regulatory data. The impairment count for the period,
consisting of 13 indemnity health insurers and seven HMOs, was well
below the single-year tally of 33 in 1999.
The frequency rate of impairments for 2009-2012 was well below the
historical average for the 15 full years encompassed by this study. The
rate declined to 0.30% in 2011 and 2012 from 0.88% in 2009, compared
with the historical average of 1.93%. The impairment count spiked to
five in 2013, but that includes four members of single group.
Impairment frequency, which is the count of impaired HMOs divided by the
number of HMOs in the United States, is considered a more consistent
measure of comparison over time than the annual number of impaired
companies. In part because the annual number of financially impaired
HMOs has fallen faster than the total HMO universe has contracted, the
annual impairment frequency declined precipitously from 4.35% (nearly
one in 21 companies) in 1998 to a low of 0.30% (one in 526 companies) in
2011 and 2012.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=220647.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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