Health Insurance Keeps Hiking

HMO graphic with dollar bills in the background
This year, when Mike Bouchery decided his employees had to have health insurance, what followed was sheer sticker shock.

At his window factory in Virginia, Bouchery and manager John Allen took quotes from 30 companies and the lowest quote was $6,000 per worker.

"Our average employee is earning somewhere between $15-20,000 a year. Its just too expensive," Boucher, of Vinyl Lite Windows, told CBS News Correspondent Wyatt Andrews.

According to Allen, "It's simple business math, we can't pay out what we don't take in."

These out-of-control health insurance costs are no fluke; they are part of a four-year trend. In fact, businesses that are shopping for insurance right now to give employees next year are being warned, again, of astronomical price increases.

In California, the public retirement system is being hit with a 25 percent increase, the City of St. Paul, Minnesota 48 percent, Florida's HMO's are hiking rates 16-34 percent. Nationwide, after three straight years of double digit increases, health insurance costs have jumped 48 percent.

Managed care has failed to manage care.

Carl Mercurio, a researcher who tracks managed care, doesn't blame the HMO's, though. Study after study has shown health care costs are rising because of spikes in drug prices, increases in hospital expenses and because patients demand the best tests and the best drugs for even minor ailments.

Mercurio says, "As Americans, we want the best health care in the world and we want unlimited access to health care and we don't want to pay for it."

Helen Darling studies health costs for America's richest companies -- the ones offering the best insurance. This year she says employers will have to ask workers to pay a much larger share of the bill.

Darling says, "They're going to be in shock when they realize that just paying a very modest proportion of the cost of their health care is going to be a whopping amount."

It's a window on a very sick system. When the richest in America see a crisis you can understand why the window factory and its workers has no shot at affordable health insurance. Almost every expert looking at the numbers believes the insurance system has hit its breaking point.