Cracks in the Risk Pool

Hewitt Associates -- a national firm that helps companies manage their health benefits -- has completed an analysis that projects HMO premiums could increase by 14.1 percent in 2008. The highest increases are projected for here in the Midwest at 18.4 percent.

It's worth noting that Hewitt predicted the 2007 increase would be 11.7 percent, and the actual increase was just 8.2 percent.

But the fact that the projection is higher for 2008 than it was for 2007 suggests that the actual increase will be more next year -- Hewitt says at least 10 percent.

What's particularly noteworthy about this report is one of the major reasons given for the increase. According to a director for Hewitt, as younger and healthier employees opt for high deductible health plans (HDHPs), HMOs are left with a sicker risk pool. This, in turn, has led to rate increases since the HMOs have "become conservative in their trend assumptions and less willing to bend on negotiations."

This is the reality of a fragmented health system at work. Unless everyone's playing in the same pool -- which is only possible through a centralized structure -- the system will become increasingly less affordable for those who need it.

And the real kicker is that virtually everyone needs it, at some point.