Kaiser Foundation Health Plan Inc.'s Hawaii region posted a third-quarter loss due in part to a significant boost in utility costs and slower-than-anticipated membership growth as companies continue to downsize in the ailing economy.

The state's largest health maintenance organization reported a $400,000 net loss—a minus 0.2 percent return on revenue. It is a reversal of fortune for Kaiser after it managed to record three consecutive profitable quarters. That compares with net income of $2.1 million, or 1 percent return on revenue, a year earlier.

The company has lowered its margin expectations and growth projections for next year, because it now projects adding only 1,000 members, or half a percent, this year. It originally estimated membership to grow by 2,000 this year, said Janet Liang, president of Kaiser Permanente Hawaii.

“;No one in health care is going to be untouched by what we're seeing in the economy today,”; she said. “;Our goal is to be just slightly ahead to maintain our current performance and break even.”;

Kaiser recorded $226 million in operating revenue and $228.9 million in expenses, up from revenue of $213.1 million and expenses of $213.6 million in the 2007 quarter. That resulted in an operating loss of $2.9 million, an increase from a loss of $500,000 last year.

Net investment income was $2.5 million, slightly lagging the $2.6 million in last year's third quarter.

For the first nine months of the year, Kaiser posted a $4.1 million profit compared with $5.1 million in earnings in the 2007 period.

Meanwhile, Kaiser is seeking a previously announced 4.9 percent rate increase that will affect 6,000 companies and 167,232 members renewing their health plans on Jan. 1. The HMO also filed a 6.1 percent increase for 4,400 individual plans with the state Insurance Division, which is reviewing both proposals.

Kaiser's increase for businesses and government employers is the highest since 2005, when its group rates jumped 11 percent. It raised rates by an average 2 percent this year—the smallest hike since boosting premiums 2 percent in both 1998 and 1999.

“;It's a hard time for everyone right now; our customers and employers are also struggling, so we feel it is our responsibility to do the best we can and not raise rates (higher) for employers,”; Liang said.

Kaiser said it is confident in its recent restructuring plan, which led to the elimination of 144 positions over the past few years, but will re-evaluate its position at the end of the first quarter of 2009.

“;We'll take a look if we're doing enough after the first quarter,”; she said.

While the HMO expects a loss in investment income in the fourth quarter, it will continue to invest in new facilities and member services, said Dave Delaney, Kaiser's chief financial officer.

Kaiser said it is better able to weather the nation's financial storm because of the strength in its integrated health care system, which comprises its own hospital, medical group and health plan.