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Reality check dealing with health insurance costs

Companies seeking help with soaring health insurance costs might have better luck taking two aspirin and calling their elected leader in the morning. The bitter pill to swallow: there's no relief in sight. "Everyone wants a silver bullet, but there isn't one," said Charles M. Arlinghaus, president of the Josiah Bartlett Center for Public Policy, a nonprofit based in Concord.

Double-digit increases in health insurance bills have hounded municipal officials for years. Every state is grappling with the issue. And the added expense has trickled through business profits and into family budgets.

Politicians have long since placed some of the blame on a lack of competition, at least in the New Hampshire market. But that's only part of it, and that's why some state lawmakers who are pushing to rein in health care costs are embracing a familiar solution - another study to determine exactly the reasons for increasing costs.

Even those who understand the complexities of the health care system do not anticipate any drastic course changes in the next year.

"What's driving health care costs? Technology, prescription drugs and an aging population," said New Hampshire state Sen. Maggie Hassan, D-Exeter. "As long as general health care costs keep going up, there is only the kind of relief in how you spread the risk."

Personal health care spending totaled $7.5 billion in New Hampshire in 2005, according to research by Douglas E. Hall, executive director of the New Hampshire Center for Public Policy Studies. The total was $5.1 billion in 2000, and Hall projects the total will climb to $10.7 billion by 2010. The biggest increases, as Hassan pointed out, include prescription drugs and home health care. Prescription drugs nearly doubled between 2000 and 2005, from $516 million to $949 million, while home health care spending jumped from $193 million to $305 million over that period, according to the Center for Public Policy Studies.

Health care spending in New Hampshire accounts for about 16 percent of the economy. The Henry J. Kaiser Family Foundation, which tracks trends in health care insurance and spending, puts New Hampshire on par with the national average.

The nation spent nearly $1.9 trillion on health care in 2004, more than twice the $717 billion spent in 1990, and about 16 percent of the Gross Domestic Product.

The foundation's state-by-state analysis indicates the pressure on Maine and New Hampshire. At 10.6 percent, New Hampshire had the second highest average annual growth in personal health care expenditures from 1980 to 2000. Nevada had the highest, at 11.1 percent. Maine, with 9.4 percent, ranked 13th.

The same report shows the significant prescription drug sales. Maine recorded $825 million and New Hampshire recorded $710 million in retail sales filled at pharmacies in 2004.

Hall's center research found that in 2004, Anthem Blue Cross Blue Shield, Cigna Health Care of N.H., Harvard Pilgrim Health Care of New England, Matthew Thornton Health Plan and Aetna U.S. Health Care received $1.2 billion in premiums to cover health care costs of 372,390 people.

Of 500,000 private sector employees in New Hampshire, 360,000 receive insurance from their employer. The Business & Industry Association (BIA) of New Hampshire has thrown its considerable weight behind the creation of a commission to examine the factors driving the high costs. Even with Harvard Pilgrim, Cigna and Anthem capturing the bulk of the New Hampshire market, it is worth shopping around for the best package and quotes, said David Juvet, senior vice president at the BIA.

Health savings accounts

Juvet said companies have few options to counteract cost increases. They can shop around, modify their plan to have a higher deductible or establish a health savings account, or take the unpopular route of shifting costs to employees.

With the savings account, people can put pretax dollars into a fund designated for paying for health products. "People are becoming increasingly worried and frustrated at how they can provide their employees health care," Juvet said.

Arlinghaus said a good, first step is promoting better use of health savings accounts to create an economic incentive to reduce costs for individuals and companies. But even that should be viewed as part of a longterm solution, he said. Approximately 1 million to 3 million people in the past six months have signed up for health savings accounts, according to Arlinghaus. But researchers, such as Hall at the Center for Public Policy Studies, say the jury is still out on whether the health savings accounts will make a difference in stemming the high cost of care.

Hassan said the accounts can make a difference for some people, but not for those who may already be sick or those with limited financial means. Hassan won her Senate seat two years ago, in part, for pledging to help small businesses pay for health insurance. She and Gov. John Lynch backed a change, which Lynch signed into law last year, that helped stabilize rates for many small businesses. With the reform, insurance companies could no longer cherry pick among the insured based on their health status or modify rates based on a company's geographic location.

Lynch also launched a health care task force last year to look into ways to control health care costs. "This is not a problem that we can solve overnight," Lynch said in his announcement.

Arlinghaus, at the Josiah Bartlett Center, agreed, bemoaning the ever-increasing costs which pose nagging economic disadvantages. "There is no one thing a company can do to lower insurance rates," he said. "Meanwhile New Hampshire is falling behind the 8- ball."