Kaiser and HMSAHawaii health insurers Kaiser Foundation Health Plans Inc. and Hawaii Medical Service Association both reported lower profits in the latest quarter, according to filings this week with the state Insurance Division.
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The state's largest insurer, HMSA reported profits of $4.2 million for the three months ending Sept. 30. Kaiser reported $2.4 million in profits.
The latest filings by the carriers use statutory accounting principles, rather than the traditional generally accepted accounting principles used by public companies. These filings will be used to determine whether state approval is granted for any future premium increases requested by the carriers.
HMSA has already said that it will ask the Insurance Division to grant a rate increase in the "low double digits" for its small-business customers to help offset operating losses. Kaiser will also likely be asking for a rate increase, spokeswoman Jan Kagehiro said.
The state Insurance Commissioner will begin regulating health insurance premium rates beginning Jan. 1.
While HMSA reported an operating loss in the third quarter of $13.1 million, it was able to offset the loss with $12.2 million net investment gain.
Year-to-date, HMSA collected over $953.7 million in revenue while Kaiser reported it collected $463.6 million for the same period.
For the first nine months of the year, HMSA lost $9.5 million. Last year for the same period, the insurer had shown a profit of $13.3 million.
While Kaiser remains in the black so far with a profit of $3.1 million for the first nine months of 2002, during the same period last year the organization reported a profit of $7.7 million.
Kagehiro said the drop in profit was due to several factors, such as an increase in patients treated in non-Kaiser facilities both in Hawaii and on the mainland and escalating pharmaceutical costs.
HMSA reported its capital surplus was $409.1 million through Sept. 30., down from $430.6 million in reserves at the end of 2001.
Kaiser Foundation Hospital
Hawaii Medical Service Association
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