This is basically to keep the plan solvent, said the boards chairman Richard Holmes.
The across-the-board premium increase, starting in 2010 for all state health plans, is aimed at heading off a projected $500 million deficit in the reserve fund used for paying claims. The premium increase also seeks to raise the employees share of the total cost of protection from 20 percent to 22 percent, slightly closer to the target of 25 percent set by policymakers.
The fund will still have a projected deficit of $75 million, according to the agencys chief financial officer, Carie Summers. Gov. Sonny Perdue will decide about whether to ask the General Assembly to come up with the money to fill the deficit.
In addition to the premium boost, the board also agreed to raise certain other costs, such as the employees share of some prescriptions and the surcharge for employees who smoke.
Ms. Summers said the health plans were having to pay for increased utilization and also for a greater number of expensive claims over $100,000. The number of hospitalization days has decreased but their cost has risen, she said.
News of the premium hike didnt sit well with at least one of the unions that represents some of the states workers.
I dont know what you could possibly say good about it, said Dennis Hammock, director of the Atlanta regional office of the Service Employees International Union/National Association of Government Employees. These benefits have increased, and the salaries have not. This is just added pressure.