Obamacare fee relief puts Kaiser in the black

Health insurers received a reprieve from an Obamacare fee this year, which in part helped to bolster the earnings of Kaiser Permanente Hawaii, the state’s largest health maintenance organization.

Kaiser earned $14.7 million in the first quarter, reversing a year-earlier loss of $21.5 million that it attributed largely to $18.5 million it paid last year in Affordable Care Act fees and taxes. Congress decided to suspend the fee starting this year.

Kaiser’s revenue from premiums grew to $366.3 million, up from $336.2 million in the year-earlier quarter, while expenses fell to $352.6 million from $358.5 million. The company — both a medical provider and health insurer with 252,654 members — earned operating income of $13.7 million, compared with an operating loss of $22.3 million in the first quarter of 2016.

The health plan’s profits were boosted by $1 million in income from investments, up from $800,000 a year ago. Kaiser also said it was able to successfully manage administrative costs, which “greatly contributed to our strong performance.”

“Kaiser Permanente Hawaii experienced robust membership growth and solid operating revenues in the first quarter,” spokeswoman Laura Lott said. “Every dollar we receive goes directly into providing high-quality, integrated care for our members and patients. An operating margin allows us to reinvest in facilities and technology to support our members’ care and deliver on our mission of providing high-quality affordable health care to the communities we serve. We continue to leverage our scale, resources and technology to drive quality and make care more affordable.”

Kaiser is preparing to take over three Maui County medical facilities July 1 in the largest privatization effort in state history. The move is set to significantly boost the company’s market share in the islands.

Lawmakers last year authorized privatization of Maui Memorial Medical Center, Kula Hospital &Clinic and Lanai Community Hospital, and the state selected Kaiser in January 2016 to operate all three facilities. The transfer was delayed following the state’s inability to amend the public workers union contracts with the United Public Workers and the Hawaii Government Employees Association.