The Hawaii HMO, the state's largest, indicates it will seek a rate increase next year
POSTED: 01:30 a.m. HST, Aug 17, 2010
The Hawaii region of Kaiser Foundation Health Plan Inc. more than tripled its net loss over the previous year to $5.1 million in the second quarter, as revenue remained flat, expenses rose and investment income shrank, the company said.
The company said it will seek a rate increase next year.
The state's largest health maintenance organization, which lost $1.6 million in the year-earlier quarter, posted revenue of $234.9 million in the second quarter of both years. Expenses rose to $241.1 million from $237.8 million a year ago. That resulted in an operating loss of $6.2 million, compared with a loss of $2.9 million in the second quarter of 2009. Investment income, which helped offset the loss, shrunk to $1.1 million from $1.3 million.
"Kaiser Permanente anticipated the first half of 2010 would be tough economically with recovery coming slowly to our state, and we planned for the effects of continued job loss and its impact on revenue," said Thomas Risse, chief financial officer, in a prepared statement.
"In spite of all this, we are committed to high quality care and service while offering affordable options in these economic times," he added.
For the first half of the year, the HMO's loss widened to $5.8 million, compared with a net loss of $1.9 million during the same period last year.
"Although Kaiser's losses increased in the second quarter, we hope with the continued improvement in the economy, they'll turn the corner and earn a profit in the third and fourth quarters," said Gordon Ito, state insurance commissioner. "Their losses are relatively moderate, and we hope the rate increases will be minimal, if any."
As of June 30 Kaiser's membership was about 226,000.
It is Hawaii's second-largest health insurer, following the Hawaii Medical Service Association, which dominates the market with 683,187 members.