HMSA net
up $10 mil
in 1998

The gain came despite lower
revenues and increased expenses

Star-Bulletin staff

The Hawaii Medical Service Association said today it had a net profit of $10 million last year, despite falling revenues and soaring expenses.

HMSA, a nonprofit mutual benefit health care organization, said it had operating revenues of $1.04 billion last year, down $30 million, or 2.8 percent, from $1.07 billion in 1997.

The result was an operating loss of $37 million. However, HMSA had $54 million in net income from investments last year.

Comparable figures for 1997 were not immediately available.

One reason revenues were down in 1998 was a $22 million dues refund to members and employers last year.

That refund, achieved by cutting the December premiums in half, was made possible by the good investment results, HMSA said.

"Alarming new trends in health care cost increases across the United States" contributed to higher expenses, Cliff Cisco, HMSA senior vice president, said in a brief statement issued ahead of today's annual HMSA membership meeting.

Full details of the results were to be announced at that meeting. HMSA said there would be no announcement about rates at today's meeting. Usually, HMSA announces its fee schedules about a week after the annual meeting, Cisco said.

Last year, HMSA raised some of its health plan premiums 2 percent, starting July 1, while others remained unchanged and some went up a half percent.

Over the past 30 years, HMSA has had some losses and some gains, Cisco said. The losses have been a very small percentage of operating revenues and they have occurred in less than half of those years, he said.

Founded in 1938, HMSA is Hawaii's largest health insurer with 600,000 members.