Small insurers
stay in the black

---

By Lyn Danninger
ldanninger@starbulletin.com

The state's two smallest health insurers, University Health Alliance and Hawaii Management Alliance Association, are holding their own despite tough times in the health care industry and financial markets.

According to its latest filing with the state Insurance Division, financially strapped University Health Alliance had broken even by June 30 this year, collecting $26.8 million in premiums and paying out almost $24 million in claims for the six-month period.

The company ended the period with a net income of $3,051. For all of 2001, the company lost $500,000.

UHA's reserves so far this year stand at $276,000 -- well short of the $4 million needed to satisfy state statutory requirements.

UHA is under court-ordered supervision by Insurance Commissioner Wayne Metcalf after the company failed to meet minimum net worth requirements.

Currently, UHA's membership stands at just over 26,000. Membership dropped 12 percent, or about 4,000 members, during the first six months of this year, reflecting nervousness about the company's financial survivability.

However, UHA doubled its size in 2000 when it acquired about 16,000 new members after Queen's Health Plans left the insurance business. UHA still owes Queen's about $60,000 of the $220,000 it agreed to pay for those members and will pay that off by year's end, according to the filing.

UHA officials referred calls to Metcalf, who said he was pleased with progress made by UHA.

"I think UHA's administration cost-cutting efforts have contributed to their improvement. They're year-to-date result is a major improvement over the nearly-half million loss they sustained for 2001," he said.

Still, Metcalf would like to see UHA's reserves rise.

"I'm hopeful that they will either attract a new investor or improve to the point of meeting their statutory requirements," he said.

Hawaii's other small insurer, HMAA saw modest membership growth during the past six months. After ending 2001 with about 26,000 members, it added more than 1,000 this year.

For the first six months of the year, HMAA collected $27.8 million in premiums and paid out $20.3 million in claims. It posted a net income of $186,628, compared with $296,192 for all of 2001.

By June 30, HMAA's reserves stood at $3.6 million, meeting state requirements.

HMAA President Arnold Baptiste said he was pleased with HMAA's results for the past six months and is hopeful about the company's continued growth.

"I'm very pleased with HMAA's growth and I believe we will have a tremendous amount of growth over the next 12 to 24 months and remain profitable during that time," he said.

Metcalf said he is hopeful that when the insurance rate oversight law becomes law on Jan. 1, more new health plans will come into Hawaii.