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News Release

August 11, 2010
Health care costs continue to outpace members’ dues

Laura Lott
(808) 952-7566

The Hawaii Medical Service Association (HMSA) ended the second quarter with a net loss after taxes of $4.13 million. This represents 1 percent of revenue and compares to a net loss of $16.79 million for the second quarter of last year.

Nearly 93 percent of members’ dues were paid directly to physicians, hospitals, pharmacies, and other health care providers. On average, HMSA paid providers more than $131 million per month during the second quarter of the year.

HMSA Dues Revenue, Benefits and Expenses

Second-quarter revenue from member dues was $425.28 million. Benefit expenses paid to health care providers totaled $394.12 million. For the same period last year, revenue was $408.30 million and benefit expenses were $388.15 million.

The net underwriting loss in the second quarter was $8.29 million, but investment income of $3.62 million from the HMSA reserve helped reduce the overall size of the loss.

“At HMSA, we work very hard to generate the greatest value for our members,” said Steve Van Ribbink, HMSA executive vice president and chief financial officer. “In the second quarter, we came within 1 percentage point of breaking even. We continue to focus our efforts on finding ways to slow the rising cost of health care and hold the line on administrative expenses. Our second-quarter administrative expenses declined by $4.31 million, or 9.9 percent, compared to the same period last year.”

HMSA Health Plan Reserve

The HMSA reserve funds special initiatives and protects members, employers and providers from losses and emergencies. HMSA has 683,187 members, and the reserve stands at $340 million, or $498 per HMSA member.

About HMSA

HMSA is a nonprofit, mutual benefit association founded in Hawaii in 1938. It is governed by a community board of directors that includes representatives from health care, business, labor, government, education, clergy, and the community at large. HMSA is an independent licensee of the Blue Cross and Blue Shield Association. Nationally, HMSA and 38 other Blue Cross and Blue Shield plans provide worldwide coverage to more than 100 million members.

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