State brochure outlines health insurance costs

With health insurance rates rising rapidly, the state’s Bureau of Insurance released a new brochure Thursday showing how each dollar is spent.

For every dollar in 1999, 37 cents went to hospitals, 30 cents to doctors and other professionals, 12 cents to prescriptions, 13 cents to insurance company administrators and 9 cents for miscellaneous expenses.

The new publication, “How your health insurance dollar is spent,” provides consumers with brief descriptions of the types of groups who buy insurance and the costs they face.

Hospital costs are one area driving up insurance premiums, according to the bureau. Hospitals went from 37 percent of the cost in 1999 to 40 percent in 2000, according to information the bureau collected. Some of those costs came from hospitals charging those with insurance more to make up for free care or inadequately reimbursed care for Medicare and Medicaid patients.

“Financing health care is a crisis in this state,” Bureau of Insurance Superintendent Alessandro Iuppa said in a recent interview.

He said employers across the state are seeing double-digit premium increases. Although the bureau doesn’t officially track increases for large group employers, some have told Iuppa they face increases as high as 30 percent.

Companies with 50 or fewer employees are also “being hammered,” Iuppa said.

“We’re continuing to see significant increases on health insurance premiums and at this point I see nothing on the horizon to mitigate it,” Iuppa said.

Employers are passing along more costs to employees. Many companies are opting to “self-insure” with the assistance of an outside company to administer the plan.But some are dropping insurance altogether.

Most of Maine’s businesses are small. The brochure points to a national survey showing that about one in 10 businesses with 50 or fewer employees would drop insurance altogether if faced with a 10 percent rate hike.

The brochure makes recommendations to health consumers and employers for curbing the rising costs in Maine.

To get a copy of the new brochure, call the bureau at 800-300-5000 (in Maine) or 207-624-8475. It can also be viewed online at http://www.state.me.us/pfr/ins/Health.Insurance.Dollar.htm.