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November 24, 2008

California health insurance premiums rising more slowly

Thousands of Sonoma County workers are facing decisions about their California health insurance, with many employer-sponsored insurance plans entering their annual open enrollment period.

Premiums continue to march upward but by and large seem to be in line with a trend seen last year: rising, but at slower rates than in the first half of the decade, when they rocketed higher and buffeted the local health care market.

Health insurance brokers who negotiate health plan packages for local companies say they are seeing some premium increases below 10 percent this year -- although depending on the plan and company size, some increases are far higher.

"It's all over the board," said Bud Martin of ABD Wells Fargo Insurance Services in Santa Rosa.

"It depends a lot on the size of the group and what kind of benefit structures they have," he said. "Sometimes it's 10 or 11 percent, sometimes it's 17."

Nationally, the annual cost of family coverage under employer-sponsored plans reached an average of $12,680 in 2008, up from $5,791 in 1999, according to the Kaiser Family Foundation, a nonprofit health research group. Employees' share of that annual bill hit an average of $3,354 last year, up from $1,543 in 1999.

Experts caution that workers shouldn't choose a plan on premiums alone, but should take into account factors such as how much they expect to use health care services.

"Often employees will just choose the plan that sounds the best or the name that sounds the best," said Debra Squyres, director of human capital consulting at TriNet. For example, an employee might choose a "Platinum" plan over a "Value" plan "not knowing really how that plan works," she said.

The San Leandro-based firm provides human resource outsourcing services including benefits management to about 900 Northern California firms.

Some plans, said Squyres, are not raising their premiums as much, but are offsetting that by increasing their patient deductibles, co-payments and out-of-pocket maximums.

That's not necessarily bad, because people who use their health services less may find that option more sensible and cheaper. But it illustrates why plans need to be carefully examined, Squyres said.

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Posted by healthinsurance at November 24, 2008 11:56 AM