HMSA Operations
Since our establishment in 1938, HMSA has operated as a nonprofit health care service
organization. We believe this financial structure best serves our members. Our goal
as a nonprofit is to operate at a break-even level while providing members with
a high level of health care benefits. Throughout our long history, an average of
93 cents of every dollar paid to HMSA has gone directly to physicians, hospitals,
pharmacists, and other health care providers to pay for our members’ care.
On average, only 7 cents has gone to run HMSA. This is one of the highest benefit
returns of any health plan in the nation.
Annual operating gains and losses should be viewed in the context of HMSA’s
long and stable financial history. This history of good years and bad years is described
by insurance actuaries as the underwriting cycle.
In 2009, HMSA applied 96.3 percent of dues to member benefits, such as payments
for physicians, hospitals and prescription drugs; used 5.7 percent to cover general
administrative expenses; and incurred a net operating loss of 6.3 percent.
For all health plans, including self-insured groups, $2.2 billion in benefits was
paid, approximately $8.7 million each working day. Of the total benefits paid, hospital
costs accounted for 48 percent, 34 percent went to professional services, 16 percent
covered prescription drug costs, and 2 percent went to dental, vision and chiropractic
costs.
