State insurance premiums go up

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An estimated 370,000 workers statewide are affected.

"This is huge all over the state," state Rep. Robert Harrell, a Charleston Republican who chairs the House budget-writing committee and sits on the board. "This is a problem all over the country. It's not unique to South Carolina."

In Greenville, Cone Elementary School Principal Scarlet Black said she had no idea the increase was coming. She worried about its impact on young teachers and those with families.

"That's a sizable increase," she said. "With the way the economy is going, you just wonder how much people can do. If all the costs are going up, that affects people thinking about quality health care."

Rates will increase by $19.04 for individuals and $38.08 for families. Annual deductibles will go up from $250 to $350 on the standard plan, and from $350 to $500 on the economy plan.

Outpatient hospital deductibles will increase from $50 to $75 and emergency room visit deductibles will now cost $125, up from $100.

Prescription drug co-payments also were increased. The co-payment for generic drugs will increase from $7 to $10, while the payment for other drugs will jump to $25 for preferred brands and $40 for non-preferred brands.

The plan needed $162.5 million for 2004 as the result of increasing costs and an aging population, officials said. The premium increases will bring in almost $55 million, while the rest will be provided through the benefit changes.

Gov. Mark Sanford and other members of the board said they were frustrated at having to heap the higher costs onto state workers, with the governor warning that "some of them out there are on the margin; it really hurts."

The Legislature did not budget any money to help offset any increases in costs for the health plan so it was left to workers to pay for the costs through higher premiums and changes in the benefits.

Sanford asked officials working with the plan to provide more choices for employees next year so workers can opt for different types of coverage.

"I think it's absolutely imperative we have more than one option," he said.

The board deleted a recommended change that would have required a review of chiropractic care after six visits.

The board also approved allowing workers to be covered by the plan if they work at least 20 hours per week. The plan previously required employees to work at least 30 hours per week. Officials said they believe some agencies will save money because some employees would be willing to work fewer hours as long as they continued to receive health benefits.

The increases stem from a rise this year of 9.1 percent in medical claims and more than 20 percent in pharmacy costs.

The new rates and fees become effective Jan. 1. While the plan is supposed to have $110 million in reserves, the Legislature waived that requirement two years ago to use the money in part to offset premium increases then.

Harrell said the reserves are normally maintained by organizations to pay for incurred costs should the organization cease to exist.

He said that isn't likely with state government.

The board last year approved an average increase in premiums of $24 per month but did not change the benefits. While workers faced small increases in premiums in the two years before that, the 1990s saw no increases.