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HMOs trying to grab market shares by lowering prices

Cutthroat price wars can set stage for failure of HMOs

Mississippi Insurance Commissioner George Dale said that when health maintenance organizations (HMOs) fail, it can often be linked to getting into a bind after offering prices that were too low.

“There is a HMO price war going on not just in Mississippi, but around the country,” Dale said. “During a price war profits are difficult. The industry is struggling somewhat. HMOs are trying to grab market shares by lowering prices and have put themselves into a bind. That`s what we`ve been seeing, and it isn`t just in Mississippi.”

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