The Hawaii Medical Service Association is reporting its ninth quarterly loss in the past two and a half years as it continues to struggle with its financial health.

The state's largest health insurer said it lost $16.8 million during the April-to-June period and said it probably will have losses through the remainder of the year.

"Hopefully it won't be as bad as the first half of the year," said Steve Van Ribbink, HMSA chief financial officer.

"I think we're seeing the health care cost trends level off — they're not increasing as fast."

HMSA has been squeezed over the past three years by a number of factors, including health care providers asking for larger claims payments and employers balking at rising health care premiums. The second-quarter loss was slightly higher than the $16.7 million in red ink it recorded during the 2008 second quarter.

Van Ribbink said a 12.1 percent average premium increase that went into effect for small businesses would help ease some of the health insurer's financial pressures during the second half of the year and that HMSA would probably not seek as large an increase for its larger business groups when rates are set for next January.

"We don't think it will be as large of an increase as last year," he said.

During the most recent quarter, HMSA's dues revenue rose faster than benefit costs, but an increase in computer and pension costs produced a jump in administrative expenses and contributed to the bottom line loss.

HMSA also reported:

• The number of members insured rose to 700,556 from 696,891 a year earlier.

• Dues revenue increased to $408.3 million, a 9.2 percent increase from a year earlier.

• Benefit expense, or what it pays out in claims, climbed 6.4 percent to $388.2 million. The insurer reported it continues to pay out 95 percent of its dues in health care benefits.

• Administrative expenses rose almost 15 percent to $43.8 million.

• Investment gains fell to $6.4 million, from $12.3 million a year prior.

The insurer also reported its reserve fund fell to $390.4 million from $536.4 million a year earlier. Van Ribbink said HMSA still meets requirements for surplus set by the state and by Blue Cross and Blue Shield.