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The Honolulu Advertiser
Posted on: Tuesday, March 2, 2010

HMSA, Kaiser absorbed late hits

 •  HMSA seeks 7.8% hike in small-business rate

By Greg Wiles
Advertiser Staff Writer

Hawai'iís two largest health plans ended 2009 on a sour note, with both recording losses in the last three months of the year.

The Hawaii Medical Service Association reported a fourth-quarter loss of $10.7 million, while Kaiser Foundation Health Plan said its net loss for the three-month period amounted to $7 million.

Both health plans said they believed the economy played a role in the losses. HMSA reported its finances were squeezed as members used more medical services at a time when it had increased what it pays to hospitals, doctors and other health care providers. Investment income on its reserves also tumbled, contributing to the results.
Kaiser reported its revenues fell as many members lost employer-sponsored coverage and enrolled in the stateís Quest program, which reimburses at a lower rate.

That forced Kaiser to absorb the unpaid costs.

Steve Van Ribbink, HMSA chief financial officer, said the higher health care use by members may be linked to workers believing their companies might go out of business. As such, employees rushed to get medical procedures and other health care services believing they might lose their coverage in the future.

HMSA ended the year with about 689,000 members, or down more than 11,000 from a year earlier.

Kaiser had 224,000 members at the end of 2009, or 1,400 more than the end of 2008.