The Hawaii Medical Service Association is running in the green for the second quarter, thanks to an increase in investment earnings that covers an operating loss. The group reported a net gain of $15.9 million, with investment earnings of $16.2 million.
“If you ignore our investment earnings, you’ll see that we would have come very close to breaking even this quarter,” said Steve Van Ribbink, HMSA’s chief financial and services officer and treasurer. “Since we’re a nonprofit, breaking even is our goal. We only want to collect enough from our members to cover their health care benefits plus the cost of administering those benefits.”
Of the $748.8 million collected in premium revenue in the second quarter, HMSA used 92.7 percent, or $693.9 million, to pay for members’ health care benefits. The cost of administering those benefits was $62.7 million, or 8.3 percent of premium revenue.
Earlier this year the company requested an increase to raise premiums of individual Affordable Care Act health plans for 2016.
“This is the highest premium increase ever requested by HMSA. The requested increase for an average of 49.1 percent for the ACA individual plan will be closely scrutinized,” wrote insurance commission Gordon Ito.
According to the company those costs affect 3 percent of its members to cover the “much higher than expected medical costs” of those people.
The change in costs remains in the request stage.
“Our employees take pride in delivering outstanding value to our members and the community,” said Van Ribbink. “In addition to keeping administrative costs down, we’re helping our members and communities throughout Hawaii improve their well-being with products such as health coaching, well-being workshops, the Dr. Dean Ornish Program to Reverse Heart Disease, and more.”
Van Ribbink said these well-being solutions are essential to HMSA’s vision for a healthier Hawaii. “While we can’t control the costs of expensive prescription drugs or treatment options, by working together, we can reduce the need for them.”
The company is headquartered on Oahu and is an independent licensee of Blue Cross/Blue Shield.