HMSA posted earning of $12.9 million in the third quarter, yet is still seeking even more premium hikes. The popular Hawaii carrier has already raised premiums earlier this year, yet this isn’t stopping them from trying to gouge people even more.
“When you have businesses going out of business left and right and people being laid off, companies downsizing or cutting hours just to survive, you have to question, Is that kind of an exorbitant profit to be making?” said Greg Culver, president of Pua Lani Landscape Design Inc., which has 46 employees. “These increased costs and profits are on the backs of small business right now. If everyone was making lots of money and the economy was booming, it’s a little easier to take – but it’s not.”
The state’s largest health insurer, which is boosting rates by an average 3.6 percent for large businesses in January, has seen its profit swell to $27 million through the first nine months of the year after losing roughly $100 million in the previous five years during the economic slump.
“We’ve come off a period of time where people were using a lot of health care services; this is the natural reversion to a more normal state,” Steve Van Ribbink, HMSA’s chief financial officer, said Tuesday. “We were operating at a substantial operating loss — an unsustainable operating loss — previous to this year. Revenue’s gone up as we’ve had rate increases that were necessary over the past couple of years to cover health care costs.”
HMSA collected $512.3 million in premium dues revenue, which was up nearly $60 million from $452.4 million in the same period last year. It paid $465.2 million to medical providers for its 689,913 members, up from $426.4 million the year earlier, resulting in an operating gain of nearly $7 million. Investment earnings of $5.4 million — down slightly from $5.8 million the year before — boosted HMSA’s bottom line to $12.9 million, compared with last year’s third-quarter loss of $6.4 million.
HMSA’s reserve grew to $375.5 million from $362.9 million in the year-earlier quarter but fell substantially from the $567.6 million in 2006.
“Every insurer, whether they’re considered a nonprofit or a for-profit, they have to at a minimum break even and have to show some profit in order to maintain a surplus to carry them through the bad years,” said health benefits consultant Paul Tom, president of Benefit Plan Solutions Inc. “Just the drop shows you they spent money to weather the deficit years. If they didn’t have a retained surplus, they would have a real problem staying in business.”
So where does this leave many of us, who are already struggling to afford health insurance for our families and ourselves? To be honest, it doesn’t look good. HMSA will more than likely get the newest premium hike approved and in turn, cost Hawaii individuals and families even more money.
There has to be some kind of cutoff point somewhere, or else what is to stop HMSA and other large carriers from raising their premiums at will? HMSA reports millions in revenue in the third quarter, states that there projected earnings for the fourth quarter are even higher, and then requests another premium hike.
At some point Hawaii individuals and families are going to have to look for another source of insurance, as premiums are already way too high.
Quotes from this story are from and original story written by Kristen Consillio of the Star Advertiser