MINNEAPOLIS (AP) -- Small and mid-sized businesses have been saying it for years and now data from the Minnesota Department of Health confirms it.
Health care premiums are rising faster than the prices of most other services, including a 16.1 percent hike in 2000.
"This is at least the second or for some companies the third year of increases of this size," said Bill Blazar of the Minnesota Chamber of Commerce. "You've got a lot of companies that are starting to wonder how they can still make this affordable."
Last year's increase is on top of increases of 12.1 percent in 1999 and just under 9 percent in 1998.
Premiums went up because the costs that health plans paid for services increased, particularly for drugs, which went up 21 percent each year from 1998 through 2000. Administrative costs also have driven up health insurance expenses, posting an average 8 percent increase the past three years.
The escalation in premiums affects 1.7 million Minnesotans.
Health Department officials say that premiums have been going up since 1997 partly because health plans are trying to make up for financial losses in the mid-1990s, when premium growth was held to less than 1 percent.
Health Commissioner Jan Malcolm said that she and other health care policy advisers to Gov. Jesse Ventura are considering several ideas about how to deal with health care costs. She said it is too early to talk about a specific proposal.
"Unfortunately, there aren't any simple silver bullet solutions here," Malcolm said. "There are lots of different points of view, whether what we need is more competition, more regulation or a mix of all of those things."
As it is, employers are already forcing more costs onto consumers, such as co-payments, co-insurance and deductibles.
"It is hitting harder and harder at people's pocketbooks and forcing them to make real choices," said Michael Scandrett, executive director of the Minnesota Council of Health Plans. "The trend will be for employers to shift costs onto employees because they can't devote more and more to employee health coverage."
That trend has already started to make waves. The dispute between the state and its union workers is in part due to the state's insistence that employees pay more for co-payments and deductibles in their health coverage. The state's two largest unions could strike as early as Sept. 17.
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