Strong earnings in the investment market, a tax benefit, and HMSA’s reserve helped offset a shortfall in 2013. HMSA reported a net loss after taxes of $44.4 million dollars. This represents 1.7 percent of the annual revenue. Last year’s loss was due to several factors including Hawaii’s aging population, assessments and fees associated with the Affordable Care Act, and an increase in health care costs.
“We’re fortunate that strong investment markets helped boost our investment income last year,” said Steve Van Ribbink, HMSA’s chief financial and services officer and treasurer. “It couldn’t have come at a better time.”
HMSA total investment earnings for 2013 was $57.13 million, more than double of what was earned in 2012. The rest of the operating loss was covered by a tax benefit and HMSA’s reserve, which is used to protect members from financial losses.
“We’ve had several successful years in the investment market and we’ve been adding the resulting earnings to the reserve for exactly this reason,” said Van Ribbink. Despite the money that was needed to cover last year’s operating loss, HMSA continues to maintain a reserve of $391.5 million or about $540 per member.
HMSA spent $2.5 billion on health care services for its members last year. That means for every dollar that HMSA collected in health plan premiums, more than 95 cents went to paying doctors, hospitals, pharmacists, and other health care professionals for member health benefits.
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, thoughtful guidance.
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.