Annual earnings for Hawaii’s top two health insurers moved in opposite directions in 2016.

Despite paying significant costs related to the federal Affordable Care Act, Hawaii Medical Serv­ice Association reported a $28.5 million profit in 2016, up from $4 million the previous year. HMSA attributed the gain to managing expenses in a volatile health care environment.

Kaiser Permanente Hawaii, on the other hand, said its loss grew to $22.8 million — from $17.4 million — due to caring for seniors and low-income patients, and paying for technology, facilities and member serv­ices. Kaiser also is making a substantial investment in three rural Maui County hospitals, which it is set to begin managing in July.

HMSA, which is changing the way it pays medical providers in an effort to reduce escalating health care costs, said it collected $3.2 billion in premiums last year, up from $3 billion in 2015. The state’s largest health insurer said it spent $2.8 billion on medical benefits for its 734,075 members, up from $2.7 billion the year before.

“As health care costs continue to rise, we’ve been challenged to find innovative ways of working with our partners to manage expenses without compromising the high-quality care our members expect,” said Michael Gold, HMSA’s chief executive officer, in a news release.

Gold wasn’t available for further questions.

Administrative expenses totaled $276.2 million, while taxes and fees related to the ACA accounted for $65.7 million. That left HMSA with a $39.6 million operating gain, reversing a $29.3 million year-earlier loss. The health plan said investment gains of $19.2 million and other income helped boost its bottom line.

For the fourth quarter, HMSA posted a $28.7 million profit, down from $50.3 million in the same period in 2015. The quarterly profit pulled HMSA out of the red and accounted for more than the insurer made for the rest of the entire year.

The company reported quarterly revenue of $793.5 million, compared with $753.9 million, and benefit expenses of $688.2 million, up from $637.3 million. Despite administrative expenses of $64.9 million and other ACA taxes and fees, HMSA had an operating gain of $38 million. Income from investments fell to $4.2 million in the quarter from $21.6 million. HMSA’s reserves, which protect members from financial loss in unexpected situations, grew to $417.64 million, or $569 per member per month, from $371.89 million.

The health plan said it will use the annual profits to “replenish its financial reserves and help offset three previous years of operational losses totaling $172 million,” largely due to the Affordable Care Act, lower Medicare reimbursements, increasing claims by the aging population, and rising costs for prescription drugs and new medical treatments.

Meanwhile, Kaiser, the state’s largest health maintenance organization with 249,687 members, reported $1.4 billion in revenue and $1.4 billion in expenses. That compares with $1.3 billion in both revenue and expenses the previous year. The HMO reported an operating loss of $26.9 million, but $4.1 million in investment gains reduced the loss.

For the quarter, Kaiser lost $12.7 million, up from a loss of $6.5 million. Revenue totaled $342 million, compared with $312.9 million, while expenses grew to $356.2 million from $320.1 million. The health plan’s operating loss totaled $14.2 million. The losses were reduced by $1.5 million in investment gains.

“Our operating results are consistent with our expectations,” said Thomas Risse, Kaiser’s chief financial officer. “We remain focused on delivering high-quality patient- and family-centered care and improving the health of the communities we serve.”