The Hawaii Medical Service Association recorded its first profit in a year and a half as its bottom line benefited from investment gains.

The state's largest health plan yesterday reported it swung to a net profit of $1.52 million during the January- to-March quarter.

The result was a marked improvement from a loss of $13.9 million a year before, when increases in health care costs outpaced gains in member dues.

The profit ended six consecutive quarters of losses as health care costs escalated from people visiting doctors and other providers more often as well as using more services during those visits.

HMSA executive vice president and chief financial officer Steve Van Ribbink said that trend continued through the first quarter, but that rate increases over the past year along with much-improved investment gains this year helped it to a profit.

But at the same time, he said investment gains are proving to be volatile this year, hinting the losses could resume in coming quarters.

"Even though the performance is improved we still are seeing very, very high health care cost trends," Van Ribbink said.

"We've had high health care trends for just about three years now."

HMSA has reacted by seeking rate increases. Last year it enacted a 12.1 percent hike in rates for small businesses and in January began increases for large employers of 11.7 percent.

Van Ribbink said if health care cost trends don't start to moderate, the insurer will have to seek future rate increases that are higher than it would like. Employers have complained about the increases given the economy and some members have switched away to cheaper plans.

The financial results reported yesterday also included an increase in revenue to $433.9 million from $398.6 million a year earlier. At the same time, benefit expenses rose to $400.9 million from $378.1 million.

Administrative expenses also rose.

HMSA reported its underwriting loss — equivalent to a loss from operations — amounted to $8.71 million, or almost $10 million lower than the 2009 equivalent quarter.

Investment gains almost doubled to about $8 million.

Van Ribbink said the number of members who are fully insured by the plan rose to 569,175. That was 15,483 more than a year earlier.

Total members, a count that includes people who come under self-insured plans that have their claims administered by HMSA, fell to 682,751 from 703,477 a year earlier.