Health insurance costs more in Colorado

The economy may be bad everywhere, but things appear to be even worse for Coloradans - at least where health insurance costs are concerned. According to a new survey, people here pay more for health insurance than the rest of the country.

Businesses in Colorado report they will be paying, on average, 13.7 percent more for their health plans in 2009 than in the prior year, compared with a national average of 6 to 8 percent. Most Colorado employers plan to push at least some of those costs onto employees; more than half of them plan to push up to 25 percent of the increase to workers.

The news comes from the Lockton Benefit Group, an independent insurance broker that released its 2009 Colorado Employer Benefits Survey Report today. The company, which surveyed 699 Colorado businesses, has conducted the survey annually for eight years as a way to show general trends in Colorado's employee benefits.

"This is distressing news," said Bill Lindsay, president of Lockton Benefit Group-Denver. "But in light of the economy ... this information is more dire, I think, than it has been in the past."

The top cost-containment strategy for employers, the survey shows, will be to increase worker premiums for dependents for the fourth year in a row. Two-thirds of respondents said they plan to do so.

No single reason has been identified for Colorado's unusually high health care costs, said Lindsay, who also served as chairman of Colorado's Blue Ribbon Commission for Health Care Reform 2007. Some possible reasons:

• Colorado has a higher percentage of small businesses than many other places, whereas large corporations can use their influence and numbers to bargain for lower rates.

• The state has a higher number of the uninsured than the national average, which can drive up costs for the insured.

Whatever the cause, one thing is clear: The pinch comes at an especially rotten time.

According to the survey, merit-based wage increases among Colorado businesses for 2009 will average 2.9 percent, down from 3.5 percent in 2008. The lower raises come as retirement funds are flagging, credit is hard to come by, and inflation in energy prices and commodities have cut bigger chunks into family budgets.

Bosses and bean counters are fretting, too. Health care costs are the No. 2 worry employers have when it comes to external factors eroding their profitability, falling just behind the financial markets.

While employees face greater financial hardship to pay for health insurance - and may end up dropping out altogether - their employers face a competitive disadvantage for doing business in Colorado, Lindsay said.

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Contact the writer: 636-0198 or brian.newsome@gazette.com.