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Colorado Health Insurance costs expected to rise

There has never been a better time to make the switch over to individual health plan. The following article ( Denver Post) echos that statement. Group Health Insurance is on the rise and insurance carriers new reform plans that are starting to write pre-existing conditions, makes it a great time to look at all options.

Colorado businesses are facing a projected 14.4 percent increase in health-insurance costs for 2011, the biggest jump in six years.

The rise in Colorado rates is higher than national averages and runs the risk of stifling hiring and business expansion, analysts said.

“The rate of increase we’re seeing is a real serious concern from a business climate and competitiveness standpoint,” said Bill Lindsay, president of Lockton Benefit Group-Denver.

The estimated increase is based on a nonscientific survey of 143 Colorado businesses conducted by Lockton, a major insurance brokerage firm.

Health-insurance costs are soaring along with profits for insurance firms. The five largest U.S. health-insurance companies recorded combined profits of $12.2 billion in 2009, up 56 percent from the previous year, according to an analysis this year of financial statements by a coalition of liberal advocacy groups and labor unions.

Insurers responded to the analysis by saying that 2008 was a bad year, skewing the comparison with 2009.

Lockton survey results show that employers will impose a share of the increase on employees and are likely to continue a trend of requiring higher deductible payments.

On average, businesses will absorb about 57 percent of the higher premium costs and pass the remaining 43 percent on to employees, according to the survey.

Lindsay said Colorado is faring worse than other states because Colorado has a higher ratio of small businesses, which tend to bear a disproportionately larger share of insurance costs.

Glenwood Springs-based Bishop Plumbing, Heating & Air Conditioning recently was quoted a 45 percent premium increase for next year from its insurer, United HealthCare.

“It’s shocking,” said Kristin Davis, co-owner and vice president of the 17-worker company. “We’ve got a fairly healthy group of employees, and we don’t have a big claims history. It gets frustrating because we have to deal with this every year.”

More than 48 percent of polled businesses said their health-plan deductible is $1,000 or greater, a big jump from 2007, when only 18 percent reached the $1,000 level.

The Lockton survey showed that aside from soaring premiums, the next biggest concern from businesses is the cost impact of the federal health care reform.

“There is a general lack of understanding on health care reform and anxiety about it,” Lindsay said. “Employers are reluctant to add new employees and expand facilities because they’re still unsure of the health care structure and what it will do to their operating costs.”

The projected 14.4 percent increase in insurance costs is up sharply from last year’s 11.8 percent rise and the highest since 2004, when Colorado premiums rose 15 percent.

According to the Colorado Health Institute, the average total annual Colorado premium for an individual went from $1,910 in 1996 to $4,570 in 2009.

Of the total, the employee portion rose from an average $350 to $971 a year, an increase of 177 percent since 1996.

Among respondents to the Lockton survey, 38 percent of employers said they will absorb 2011 rate increases with no pass-through to employees.

Broomfield-based telecom firm Level 3 said it will not raise costs to workers if they participate in company wellness programs that include tobacco cessation and health-risk screening.

“We’re finding that this is turning into a little bit of a recruitment strategy,” Cathleen Chambliss, a human-resources senior executive at Level 3, said recently. “With these economic conditions, a lot of employees are looking much more seriously at the benefits they get. Absorbing some of these costs is Level 3’s way of attracting top talent.”

Although the survey showed that 22 percent of companies will change insurance companies, businesses generally have been reluctant to reduce the number of insurance plans offered to workers, said Robert Cohen, chief executive of insurance broker IMA Financial Group.

“We have not seen employers trim the number of health plans they offer their employees,” he said. “If an employer has continued to offer coverage for their employees, especially over these past several tumultuous years, they seem to be committed to remaining stable with the number of plan choices they offer.”

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