Rays of hope: health costs and health-insurance premiums are still on the rise, but 2006 increases are smaller than last year's.

• Position: HEALTH CARE SPECIAL SECTION

Although health care costs are rising, local insurance companies and employers say there is reason to be optimistic about a problem that has had even the national experts stumped for years. "The increases we've seen have been less than in prior years," says Joe Hoffman, vice president and general manager for Anthem Blue Cross and Blue Shield of Colorado and Nevada.

"In the late 1990s and early 2000s, we saw percentage increases in the high teens and twenties, and sometimes in the thirties. Now the increases are in the double digits or high single digits."

Dave Uppinghouse, senior vice president of employee benefits for Van Gilder Insurance Corp, agrees that recent cost trends are good news. "I think we are seeing some encouraging signs," he says. "I would generally say we are seeing stabilizing effects." The 101-year-old Van Gilder Insurance Corp. is the largest independent insurance brokerage firm in the Rocky Mountain region.

Uppinghouse says 2006 premium increases will be lower than last year. Employers with fewer than 50 employees will see an average rise in premium costs of 12 to 18 percent for 2006. "That's down a few points from a year ago, so it's showing signs of going in the right direction," he says. Companies with 50 to 500 employees will see increases of 8 to 10 percent, and the largest companies will see 5 percent increases.

Uppinghouse says one reason for the smaller increases is that consumers are becoming smarter about their prescription drug purchases. He says a prescription this year will cost about 10 percent more than the same prescription last year, but those costs might go down as more generics hit the market.

Kate Paul, President/CEO of Delta Dental Plan of Colorado, is a little less optimistic about rising costs. She says estimates from the Centers for Medicaid and Medicare Research (of the U.S. Department of Health and Human Services) indicate that health care will be 20 percent of the U.S. gross domestic product by 2015, which she calls "very worrisome."

"With the growth in health care capacity within the state I only see costs continuing to rise," she says. "There is no real relief in sight."

Insurers and employers offer consumers opportunities to help keep costs level. Hoffman points to programs such as Anthem's radiology management program, which helps cut down on duplicate tests. For example, instead of undergoing a CT Scan and MRI, the patient can get the MRI, which he says would show a decisive result.

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