The Hawaii Medical Service Association had its biggest quarterly loss in almost seven years because of a number of setbacks, including a higher-than-expected number of member visits to doctors and emergency rooms.

The state's largest health insurer reported a net loss of $23 million in the July to September quarter as benefit payments grew faster than member premiums. The loss compared with a net profit of $5.14 million a year earlier, HMSA's only profitable quarter since the end of 2006.

The nonprofit insurer said the increase in costs could have been driven by a number of factors, including people trying to get in doctor visits before being laid off. The rise could also be driven by worries about the H1N1 flu, the insurer said.

Steve Van Ribbink, HMSA chief financial officer, said there also had been a noticeable uptick since June in the number of physician and ER visits by people who had flulike symptoms.

"We've seen a real pick up there," Van Ribbink said. "On the Mainland a lot of insurers went through a lot of the same experience from April or May."

In the third quarter, benefit payments rose 8.7 percent while premium revenue grew at a slower 5.5 percent clip.

The loss was only second in size to the $31 million of red ink HMSA suffered in the fourth quarter of 2002, Van Ribbink said. He said the insurer will likely incur another loss in the current quarter and end the year with a net loss larger than $54 million.

The nonprofit insurer's results have been squeezed in recent years by rising medical costs, including pressure to pay doctors and hospitals more, while facing complaints from businesses and members about rising premium costs.

HMSA also has had lower investment income to offset its operating losses, while seeing an erosion of its membership.

The insurer has tried to staunch some of the losses by increasing or proposing higher premiums. In July it enacted an average 12.1 percent increase for about 11,000 community-rated groups that are primarily small businesses.

It also has proposed an average 9.9 percent increase for large businesses that renew in January.

"We don't want to pass on rate increases when the economy is like this, but on the other hand we have to keep premiums close to what's happening with the health care costs," Van Ribbink said.

"We're working closely with the provider community to get quality up and the health care costs under better control."

The quarterly report showed HMSA endured several negative trends during the quarter besides the unexpected jump in benefit costs.

Administrative costs rose 5.8 percent, also faster than revenue, while the insurer lost 14,752 members compared to a year earlier, ending September with 682,383 members.

HMSA also paid out 98.3 cents of every dues dollar it received. The insurer's goal is to pay out 93 cents of every dollar in benefits and use the rest to cover its operations and add to its reserve fund.

The reserve has been declining over the past year as HMSA uses it to cover losses. During the third quarter, reserves fell to $381.5 million from $489.0 million a year prior.

Van Ribbink said one bright spot for the insurer was the rebound of investment income compared to recent quarters. HMSA uses the investment returns to hold down premium increases.

"The one good thing is at least unlike the last year the investment markets have been better for us," he said.