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Health Insurance Companies: Economic Results

Commentary

Contents

Brief analytical comments


In Q2 2007 the number of active units operating in the area of health insurance was the same as in the corresponding quarter of 2006, there were a total of nine health insurance companies in the CR. In Q2 2007 there were in total 6 992 employees (FTE), which was 1.1% less than in Q2 2006 (7 071 employees). The average monthly wage (calculated from wages free of other personnel expenses and from the number of the employed persons above) increased from CZK 26 477 in Q2 2006 to CZK 28 534 in Q2 2007 (+7.8% year-on-year)

Premiums written (excl. those paid by the state) make up a substantial part of total revenues of health insurance companies. In Q2 2007 they amounted to CZK 38.0 billion, rising by 8.4% on Q2 2006. This increase was particularly contributed to by a rise of insurants’ income and hence payments of health insurance and further by the increase of the minimum wage from CZK 7 570 to CZK 8 000 (Government Regulation No. 567/2006 Coll.) because payments of health insurance premiums are derived in some cases from the level of minimum wage. It should be also noted that the premiums written measured on accrual basis are not actual revenues of health insurance companies as these are lower by premiums not paid.
According to the Ministry of Health data, the actual revenues of the insurance companies—collections of premiums incl. those for persons paid by the state—reached CZK 97.6 billion in Q1-Q2 2007. It is however necessary to emphasize that the revenues of the health insurance companies in this period cannot be compared to Q1-Q2 2006, considering the fact that this period sow a change in the frequency of payments of the state for its insurants (returnable financial assistance, “advanced payment”, from the state budget within the meaning of Article 12(2) of Act No. 592/1992 Coll.) amounting to CZK 5.5 billion and total revenues reached CZK 92.9 billion. In Q1-Q2 2007 the “advanced payment” was not made. Without the advanced payment in Q1- Q2 2006 revenues from premiums incl. state payments for state insurants would increase by 11.7% year-on-year.1

Of the total costs of health insurance companies in Q2 2007 (costs and expenses established by expenditure approach from respective funds of health insurance companies), 95.4% accounted for health care costs paid from the basic health insurance fund and the prevention fund or possibly from the preventive care fund; these costs increased by 2.1% year-on-year (see Table 3). Institutional care costs make up a key proportion in health care costs (51.5%), these had the increase compared to same period of 2006 (+7.1%).

In Q2 2007, the health insurance companies acquired intangible and tangible fixed assets (incl. land) worth CZK 46.6 million and CZK 54.5 million, respectively. The balance sum of the health insurance companies (the sum of assets or liabilities) reached CZK 73 billion at the close of Q2 2007,and compared to the end of Q1 2007 it increased by CZK 4.7 billion. The acquisition value of intangible and tangible fixed assets (depreciated) – net in assets of the health insurance companies was CZK 26 million down on Q1 2007.
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1 According to the CZSO’s calculations, the actual revenues of the insurance companies reached in Q2 2007 in total CZK 48.7 billion, which meant an increase of 4.4 % compared to the same period in 2006. It is however necessary to emphasize that the revenues of the health insurance companies in this period cannot be compared due to the same reason mentioned above in the text. Without the advanced payment revenues from premiums incl. state payments for state insurants would increase by 10.3% year-on-year.