HMSA earns $42.7M in first quarter

May 18-- May 18--Hawaii Medical Service Association's profits soared to $42.7 million in the first quarter, reversing a year-earlier loss of $17.6 million.

HMSA attributes the substantial gain to healthier members due to working together with employers, partners, physicians and other health care providers. In addition, the insurer said it benefited from a suspension of fees and taxes related to the federal Affordable Care Act, a law requiring that most Americans obtain insurance coverage. The federal government suspended this year the annual "insurer fee," used to help fund federal and state marketplace exchanges where consumers buy health plans, but is expected to reinstate it next year.

The health plan with 727,965 members reported Friday that it collected $889.6 million in premiums in the quarter, up from $876.3 million in the year-earlier period, and spent $777.8 million on medical benefits compared with $757.6 million. HMSA's administrative expenses rose to $81.1 million from $74.9 million, resulting in an operating gain of $29.9 million, compared with a loss of $24.1 million. Investment gains nearly doubled to

$8.6 million from $4.5 million.

"Our financial stability allows us to work with every stakeholder in the health care system to improve the lives of our members and the health of Hawaii," said Gina Marting, senior vice president and chief financial officer of the state's largest health insurer.

Meanwhile, Hawaii's health care industry is going through major changes, largely due to an overhaul in the way HMSA pays providers. The insurer started

in 2017 reimbursing

physicians a fixed monthly rate for each patient in a practice, regardless of how many times a patient

visits the doctor.

That replaced the fee-for-­service model, which pays doctors based on the number of visits and type of service. The payment model is intended to improve patient care, thereby controlling unsustainable health costs.

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