The Hawai‘i Medical Service Association (HMSA) reversed its 2013 year-end loss, closing 2014 with a 0.1 percent gain of $4.2 million dollars. The company reported its financial earnings to the state Insurance Division today.
“We’re definitely in a much better place than we were a year ago,” said Steve Van Ribbink, HMSA’s chief financial officer and treasurer. “We had to make major adjustments last year to compensate for changes due to the Affordable Care Act, lower Medicare reimbursements, Hawaii’s aging population, and the rising costs associated with new specialty drugs that are coming on to the market.”
Of the $2.87 billion collected in premiums last year, HMSA spent $2.6 billion or 90.5 percent on health care services for its members. Administrative costs of $238.0 million represented 8.3 percent of premium revenue. Another $65.4 million, or 2.3 percent of premiums, was used to cover fees and taxes associated with the Affordable Care Act.
“The premiums we collected last year weren’t enough to cover our members’ health care benefits and the cost of administering those benefits,” said Van Ribbink. “Fortunately, we had strong investment gains to offset our operating loss of $31.5 million. But we can’t continue to depend on the investment market.”
HMSA’s investment earnings totaled $34.4 million last year. The health plan had a total of 720,982 members in 2014.
“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.”
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.