HMSA stung by rapid rise in healthcare service costs
Advertiser Staff
The Hawaii Medical Service Association said healthcare service costs rose faster than premium income during the three months ended Dec. 31, resulting in an operating loss. A gain from investments helped the state's largest health insurer report a net profit.
THE NUMBERS
Premium revenue: $459.3 million vs. $432.7 million year ago.
Net income: $4.03 million vs. $6.67 million year ago.
Operating loss: $19.96 million vs. $1.01 million year ago.
2006 premium revenue: $1.81 billion vs. $1.72 billion in 2005.
2006 net income: $17.8 million vs. $25.5 million in 2005.
2006 operating loss: $39.3 million vs. $29.1 million in 2005.
REASONS
WHAT THEY ARE SAYING
"Healthcare costs are rising more rapidly than we anticipated when we rated our products. We missed in our estimation of health-care costs."
Steve van ribbinkHMSA chief financial officer
WHAT'S NEXT
HMSA said it may have operating losses in the first and second quarters.
It may seek a larger premium increase for its small business groups if costs keep rising.
HMSA is continuing to fund an information technology improvement program out of its reserves.
