Wednesday, October 29, 2008

Idaho premiums skyrocket

Health insurance spiked during last eight years


By DANA DUGAN
Express Staff Writer

Rising health insurance premiums are a reflection of rising health care costs and Idaho residents are feeling it.

A new study by Families USA, a national organization for health care consumers, shows Idaho experienced a dramatic increase of 121.6 percent in health care premiums over the past eight years. The report was released Thursday, Oct. 23. Idaho's cost hike was second only to Wyoming's in the nation.

The study finds that health insurance premiums are rising considerably faster than workers' earnings. As a result, health care costs are consuming increasingly large portions of family budgets. The report said that situation is causing "substantial hardships."

"If this trend continues, more and more families will inevitably join the ranks of the uninsured and underinsured, and Idahoans will face diminishing economic and health security," the report stated.

But Shad Priest, deputy director of the Idaho Department of Insurance, explained that Idaho's rates are still one of the lowest in the country.

The Idaho Department of Insurance regulates insurance agents and the business. There is no federal department of insurance, so each state has one, though the department does not oversee rates.

"Idaho is a free-market state and relies on competition," Priest said. "But it's a national problem. The average employer group rate for 2007 is a little lower than the other states, which could imply that we're kind of catching up with the other states. Why are we trending that much higher? Wyoming and Idaho both suffer from a similar demographics problem. Rural areas have a hard time attracting physicians, which can lead to higher costs. You can't shop around. At the end of the day, the cost of insurance rates is a reaction to what health care costs are doing."

For family health coverage in Idaho, the average annual premium (employer's and worker's share of premiums combined) rose from $5,160 to $11,432, an increase of $6,273. Neighboring rural state Montana rose from $6,220 to $11,743, while Utah rose from $6,305 to $11,644. At the same time, the median earnings of Idaho's workers increased from $19,004 to $24,798.

Mike Tatko, media relations manager for Regence Blueshield of Idaho in Lewiston, theorizes that because Idaho is a rural state it is "on the back end of new technology."

"When it finally arrives, you have to pay for it," he said. "Costs have to be covered. Upgrades have to be passed on."

Companies like Regence think that if clients kept their health care costs down, premiums might stabilize.

"We tell people on medication, who we insure, to go to their doctors and ask about getting the generic equivalent, which can be less than half the price of the brand-name medication," Tatko said. "Also duplication of tests is an enormous expense. We're on a task force for the Health Data Exchange, where medical records can be kept so tests aren't given unnecessarily. We're trying to be on the forefront on this."

Costs also go up because of personal habits such as tobacco, passive smoke and obesity with its related complications, which all cost billions each year to treat.

"We're trying to find solutions," Tatko said. "Employees who are well don't miss work and are more productive. Cancer survivors are in the millions now, but people still have illnesses—it costs money for medications and tests. Advances have many advantages, but it costs. Hearts, hips and knees are routinely replaced. It's a matter of quality of life. And who wants to give that up?"




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