State HMO´s Getting Fat
California´s largest HMO´s are getting richer even as rising medical costs strain their customers.
Financial figures filed with state regulators show the HMO´s stockpiled reserves totaling $3.15 billion dollars as of September 30th. That´s $2.2 billion more than they need to meet standards set by the California Department of Managed Health Care.
The five HMO´s are Kaiser Foundation, Blue Cross, Health Net, Blue Shield and PacificCare.
Officials with the HMO´s say policyholders should take comfort in the healthy reserves – saying they are a sort of rainy day fund.
But critics say the large sums are a sign of runaway greed.
HMO´s have been raising their rates substantially in the last two years — citing the rising cost of health care.
The trend has squeezed employers and taken an even bigger chunk out of consumers´ wallets.
But many doctors believe HMO prosperity is coming at their expense and the large reserves have caused state regulators to say the plans can invest more in better services.