May 16, 2013
HMSA premiums not enough to keep up with rising health care costs
Members of the Hawai‘i Medical Service Association (HMSA) paid less than what
it actually cost to cover their health care benefits in the first quarter of 2013.
HMSA ended the quarter with an operating loss of $9.5 million dollars.
“Simply stated, the money we’re collecting from members and businesses
for their premiums is not enough to keep pace with the rising cost of health care,”
said Steve Van Ribbink, chief financial and services officer and treasurer of HMSA.
“Fortunately, carefully placed investments are helping to ease some of the
Investment income from the HMSA reserve and other income of $5.9 million helped
offset more than half of the first quarter operating loss, bringing the net loss
after taxes to $3.6 million. HMSA’s contracts with physicians, other health
care professionals, hospitals, and pharmacies are also helping to control some of
“The health care providers in our network have made major advances using tools
and programs that help make their patients healthier. This helps everyone by reducing
the need for expensive treatments and procedures,” said Van Ribbink. “The
challenge now is to motivate patients to take an active role in their health care.
People need to understand there are both health and financial benefits to taking
control of their own health and well-being.”
For every dollar it collected in the first quarter, HMSA spent 92.3 cents paying
for members’ health care. The remaining 7.7 cents was not enough to cover
administrative expenses without using investment income and funds from the HMSA
At the end of the first quarter, HMSA had 721,676 members and the HMSA reserve held
$459.3 million, or $636 per HMSA member. The reserve is up $37.1 million over the
same period last year. The HMSA reserve protects members, employers, and providers
from financial losses and emergencies, and is used to fund special health care initiatives.
Caring for the people of Hawaii is our promise and our privilege. Working together
with employers, partners, and physicians and other health care providers, we promote
wellness; develop reliable, affordable health plans; and support members with clear,
HMSA is the most experienced health plan in the state, covering more than half of
Hawaii’s population. As a recognized leader, we embrace our responsibility
to strengthen the health and well-being of our community.
Headquartered on Oahu with centers statewide to serve our members, HMSA is an independent
licensee of the Blue Cross and Blue Shield Association.