HMSA, Kaiser in the black so far this year
HONOLULU (HawaiiNewsNow) - Hawaii's largest health maintenance organization and its largest health insurer both reported good financial health in the first quarter, which means the prognosis for the current quarter is also good.
Kaiser Permanente Hawaii, the HMO, reported $2.8 million net income from the first quarter. Revenue was $261 million, up from $238 million a year ago when Kaiser ended the first quarter in the red.
Hawaii Medical Services Association, the Blue Cross provider for Hawaii and by far the state's largest health insurer, reported $8 million in net income. Revenue was $519 million, up from $434 million a year earlier.
Both Kaiser and HMSA got almost half of their net from financial portfolios they maintain as a hedge against operating losses in case of epidemic or miscalculation. In each case the net was only about 1 percent of money taken in through premiums.
The key reality driving health care organizations is that rates and premiums only go up at set times - some premiums rise on Jan. 1 and some on July 1 - while costs rise gradually throughout the year. Often, losses in later quarters will offset extra cash in earlier ones.
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