Health insurance premiums spike for Idaho state government employees, dependents

Health insurance premiums for Idaho’s state employees and their dependents will rise sharply.

How much monthly premiums will rise for each family or enrollee depends on what health insurance plan they’re on. But for state employees, all three health insurance plan premiums will likely rise faster than the minimum pay raise rate the Idaho Legislature approved for state employees.

The insurance premium increases are due to a mix of factors — mostly centered on the ever-rising costs of health care and the types of services that people seek, state officials say.

Here’s how monthly premiums will rise for each insurance plan type, according to the Idaho Capital Sun’s analysis of premiums published by the Idaho Office of Group Insurance for this year and next year:

For the plan that has the highest enrollment level, the preferred provider organization, or PPO, monthly premiums will rise by 8.8 percent. High-deductible plans will also see a 8.8 percent jump in premiums. But for traditional health insurance plans, the most expensive option, monthly premiums are set to rise by 20 percent. Dental plans will see the smallest increase, of just 2.2 percent.

The time to pick insurance plans — called open enrollment — has already ended.

The new premiums kick in on July 1, when the new plan year starts. They will last until June 30, 2026.

Almost 27,000 people are enrolled in Idaho’s state government health insurance plans.

The vast majority — nearly 85 percent, or almost 22,700 people — are enrolled in the PPO plan. Roughly 8.5 percent, or almost 2,270 people, are enrolled in the traditional plan, which is seeing the sharpest premium hike. Another 7 percent are enrolled in the high deductible plan.

Nearly everyone enrolled in health insurance is enrolled in the dental plan as well.

Why insurance premiums for state employees are rising

In July 2024, Idaho switched insurers for state government employees — for the first time in nearly two decades, the Idaho Capital Sun previously reported. Regence BlueShield of Idaho is now the state’s insurer.

The main factors driving up health insurance rates “are soaring prices for medical care and prescription drugs,” said company spokesperson Lou Riepl. But cost is also affected by more use from people enrolled, he added.

“Health insurance rates reflect what care is expected to cost,” Riepl told the Sun in an email. “… As a nonprofit health insurer, Regence shares concerns about the high costs of health care and we strive to manage those costs where we can, such as by negotiating with care providers and drug companies for discounted rates for our members. Nearly 90 cents of every premium dollar directly pays for member medical claims and expenses such as doctor visits, hospital care and medications.”

In a mid-April letter to the nearly 2,300 people enrolled in the traditional health insurance plan — which is seeing the sharpest premium hike — state insurance officials explained costs are rising because of factors many employers are seeing, like more use of health care services by employees and retirees, higher costs for medical services and prescription drugs, and “shifts in enrollment across the three available health plans.”

That’s according to a copy of the letter that the Sun obtained through a public records request from the Idaho Department of Administration, which handles state government contracts and houses the Office of Group Insurance.

Asked why other health insurance plans’ premiums are rising, Idaho Department of Administration spokesperson Kim Rau told the Sun in an email it is “primarily driven by the continuing trend of nationwide health care spending increases.”

“The rising costs of health insurance for Idaho are primarily driven by the counting trend of nationwide healthcare spending increases, higher medical claim volume and high-cost claims … and the growing use of high-cost specialty medications like GLP-1s.” (GLP-1s are a class of drugs commonly used for weight loss, like Ozempic.)

Former state insurer, Blue Cross, still runs dental plan — which is seeing the smallest rise

Blue Cross of Idaho, which previously ran insurance for state employees, still runs the state’s dental insurance plan. Dental premiums are rising by 2.2 percent.

“Blue Cross of Idaho takes its role as a steward of taxpayer dollars and state employee contributions seriously to help achieve the best dental outcomes at the lowest cost,” company spokesperson Bret Rumbeck told the Sun in an email.

Asked if Idaho’s shift from Blue Cross to Regence is impacting insurance rates, the Department of Administration spokesperson said it was too early to tell. Idaho is not through year one with Regence.

“However, despite increasing medical costs throughout the nation, and increased costs related to claims and the use of expensive specialty medications in Idaho, Regence has met all of its performance guarantees to date, and we don’t have any reason to think our plan costs are any higher than they would have been with another carrier,” Rau said.

Regence’s spokesperson said it sets premium rates each year by working with an independent actuarial and consulting firm to predict costs and use.

“At the same time, we are focused on delivering promised service enhancements and cost efficiencies in the administration of the state plan,” Riepl told the Sun.