Oregon Public Broadcasting

Many Americans get their health care through work. And usually about this time of year, employers shop for medical insurance for next year's benefits package. Many in the Northwest are finding that their premium rates will go up. But as Ruby de Luna reports from KUOW, the reason for the rate hike depends on whom you ask.

In her 10 years at Boeing Employees Credit Union, Sara Charhon has seen health insurance rates go only one direction...

Sara Charhon: "Unfortunately, premiums never go down, they always go up, or stay the same if we're fortunate."

Charhon is BECU's Compensation and Benefits Manager. Her job is to find the best insurance plan for her co-workers, about 1,000 employees at BECU.

In the past she's seen rates go up as high as 17 percent. This year Charhon expects them to go up again.

She's met with one of the insurance carriers. They say part of the increase stems from the mandates by the new health care law. Those changes include extending benefits to adult children.

Also, health plans must pay for preventive services like vaccinations and cancer screenings.

Sara Charhon: "Any plan design change can either help you or hurt you. These ones are going to cost the carriers more money so unfortunately we then feel that cost because they're going to be feeling that cost."

But not everyone is buying the idea that the rate hike is the result of the new law's requirements for patient coverage.

Take Gary Kushner. He owns and runs a benefits consulting firm. He's been doing it for almost three decades.

He says the cost of extending benefits to adult children, for example won't be much…

Gary Kushner: "In most cases individuals in their low to mid-20s tend to be very inexpensive to insure because the vast majority of them tend to be very healthy so we see very little cost increases there."

Here's what Kushner thinks is happening: the new law requires that 80-85 percent of every premium dollar must be spent on medical claims. That in effect, limits the insurance companies' administrative costs and profits.

Kushner thinks carriers are raising their rates as part of a business strategy…

Gary Kushner: "Because you're dealing in percentages and not flat dollar amounts, if I'm allowed to make say, 10 percent profit, I'd rather make 10 percent on $1 million than on $500,000. 10 percent is still 10 percent, but I make more profit that way."

Congress tried to limit insurance companies' profits with the new health care law. But Kushner says it also caused carriers to begin raising rates before that provision takes effect in January.

The insurance industry insists that rate increases are necessary to pay for the expanded benefits and coverage under the new law…

Robert Zirkelbach: "There are new requirements in the Health Reform Law that go into effect  that require health plans to offer more coverage and policies to be more robust than they previously were, and of course, those have costs associated with them."

Robert Zirkelbach is spokesperson for America's Health Insurance Plan, a trade group for health insurance companies. Zirkelbach argues that the portion of premiums that go toward administrative costs and profits has declined for six straight years.

He says medical costs have been and still remain the primary driver of rising health premiums…

Robert Zirkelbach: "it's time to shift our focus on those costs and what we can do across the health care system to bring down those costs, make the system work better, more efficiently and insure that we're rewarding value and quality across our system."

Zirkelbach says insurance companies have to show state regulators that every rate increase is necessary to meet future health costs.

That leaves employers in a quandary.

They're the ones having to make sense of all the new rules and make sound decisions that could affect costs now and in the long run.

For example, companies who like their health plans can keep them. But if they want to make changes, like cost-sharing or even switch carriers, they may be restricted under the new rules.

It's confusing, especially for people like BECU's Sara Charhon as she shops around for the best health plan.

Sara Charhon: "What we're really craving is clarification…yeah, there's definitely a ton of ambiguity out there, and we are waiting for clarification."

There may be a lot of ambiguities now.

But one thing is certain. The law continues to be implemented in phases so more changes will come in the next few years.

The new health care policy is expected to be fully in place by 2014.

As for Charhon, she and her colleagues at BECU expect to finalize the company's benefits package by mid-October.