West Virginia Insurance Commissioner Hanley Clark recently testified against a proposal to impose a 3 percent premium tax on his state's health maintenance organizations.
West Virginia HMOs are still in their infancy and are not yet ready to bear the burden of a premium tax, Mr. Clark told the state Legislative Oversight Commission on Health and Human Resources Accountability.
'I wondered whether a state with a population of 1.8 million can support seven or eight HMOs,' Mr. Clark said in a telephone interview. 'This is just a question we're going to have to look at.'
HMOs came late to West Virginia. Only two HMOs have been doing business in the state for more than three years, and HMOs cover only 10 percent of state residents. The average in the rest of the United States is 20 percent.
The HMO with the biggest presence in West Virginia, Health Plan of the Upper Ohio Valley, St. Clairsville, Ohio, has an enrollment of 44,139.
The six other HMOs that reported enrollment totals were PrimeOne, Charleston, W.Va., 35,856 members; Carelink, Charleston, 19,099 members; Advantage Health Plan, Bellaire, Ohio, 9,763 members; Optimum Choice, Rockville, Md., 2,850 members; and Health Assurance, 224 members, Wheeling, W. Va.
Mountain State Blue Cross & Blue Shield, Parkersburg, W.Va., is organizing an HMO of its own but has not yet reported enrollment figures.
One HMO company, Humana Inc., Louisville, Ky., has left the market, and the owner of the Advantage plan is selling it to Health Systems International, Pueblo, Colo.
Mr. Clark said he expects to see more mergers and acquisitions as West Virginia HMOs go through the kind of consolidation that has been reshaping bigger HMO markets.
Insurance officials do not plan to change the way they regulate HMOs, said Mr. Clark, 'unless we have a failing HMO.'
Some of the West Virginia HMOs have needed cash infusions from their corporate parents. But, so far, none of them seems to be in danger of failing, according to the commissioner.
Carl Callison, spokesman for Mountain State Blue, said HMOs are losing money in West Virginia because so many are startup operations.
'I doubt any of them predicted turning a profit before anything less than three years,' he said.
Mr. Callison said he worries more about the reasons that organizers started the HMOs. 'They're letting public programs drive the development of HMOs.'
Most West Virginia HMOs formed at least in part to serve Medicare and Medicaid beneficiaries or the state employees' union, according to Mr. Callison.
