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Alice Lowe is living on the edge.

Her health insurance plan as an employee at Santa Rosa's Redwood Gospel Mission has a $5,400 deductible, meaning she has to pay the first $5,400 in medical expenses each year.

The plan, which costs her about $250 a month, one-fourth of the total premium, was adequate as long as no one in her family got sick, Lowe said. But a case of acute pancreatitis sent her to the hospital several times this year, and Lowe's share of the bills surpassed her deductible and hit the $9,000 out-of-pocket limit, wiping out an inheritance.

"I don't have a cushion to fall back on," said Lowe, who makes $2,500 a month working at the mission's Thrift Store on Piner Road. "We'll just be praying that I don't have another attack."

She's among the 34 percent of California workers with health insurance deductibles of $2,000 or more last year, one consequence of the runaway costs of health care — and health insurance — in the United States.

In 2006, just 15 percent of workers had deductibles in that range.

Jeff Gilman, executive director of the gospel mission, said he has to hold costs for insuring the nonprofit charity's 25 full-time employees to a total of $150,000 a year.

That meant boosting co-payments, and then the deductible, which is now $5,400 a year for most employees. "We ended up getting less and less coverage," he said.

The mission has been late on paying its 75 percent share of premiums, he said, and even considered dropping insurance.

"Yes, it hurts," Gilman said, "because our staff is like a family. It's like saying to your family, &‘we can't meet this basic need you have.'"

The mission's dilemma is a microcosm of American health care, with spending expected to hit nearly $2.6 trillion this year, accounting for 17 percent of the national economy and driving insurance premiums steadily upward.

Insurance carriers, whose annual revenue tops $100 billion in California, are tightlipped about premium increases in 2011.

But experts and insurance carriers say that premiums for employers, workers and families on the North Coast and across California will rise about 10 percent next year.

For example, the California Public Employees' Retirement System, known as CalPERS, which provides health insurance for about 1.3 million public agency workers, will boost non-Medicare premiums overall by 9.9 percent.

That's the largest increase in four years for CalPERS and three times higher than this year's 3.2 percent increase.

Kaiser Permanente, which collects one-third of the state's health insurance revenues and covers more than 170,000 Sonoma County residents, said large group premiums will increase "in the single digits" in 2011, while the average increase for small groups will be "slightly higher."

Anthem Blue Cross, the state's No. 2 insurance carrier with 15 percent of revenues, declined to name its rates for 2011. Companies keep that information "close to the vest," Anthem spokeswoman Peggy Hinz said.

Health Net, which collects 10 percent of health insurance revenues, expects to boost group plan premiums in "low double digits" and individual premiums slightly higher, spokesman Brad Kieffer said.

Health insurance premiums consumed nearly one-fifth (19 percent) of median household income in California last year, according to a report by the Commonwealth Fund this month.

If current trends continue, a family insurance plan that cost $12,631 in California last year will nearly double to more than $23,000 in 2020, the report said.

Higher premiums are "making it difficult for many U.S. families to save for education or retirement — or simply to meet day-to-day living expenses," Commonwealth's report said.

Health care, said Gilman, the gospel mission director, is "a horribly broken system."

Health insurance premiums are "going up at a staggering rate," said Marian Mulkey, director of health reform and public programs at the California HealthCare Foundation.

Since 2002, premiums in California have increased 117 percent, more than four times higher than the rate of inflation, while health care spending per person nationwide increased 50 percent during the same period, reaching $8,290 this year.

The primary insurance cost driver, Mulkey said, is inflation of virtually all medical services, including prescription drugs, diagnostic tests, devices and hospital admissions.

"We use more services and we pay more for what we use," she said.

Another factor, she said, is the decision — primarily by young, healthy people — to drop insurance as the premiums go up. Those still insured "tend to be a little bit sicker than the population as a whole," Mulkey said.

Soaring costs are eroding the conventional standard of employers paying 75 percent of premiums, leaving 25 percent for workers.

"Often we see companies cutting their contributions down to as low as 50-50," a shift that doubles the employee's cost, said David Hodges, a Santa Rosa insurance broker.

For a worker enrolled in a $380-a-month HMO plan, the difference is an additional $95 a month.

Alice Lowe, whose insurance also covers her husband and an adult son, said the limits on her plan are forcing "hard choices" on "life-threatening kinds of things."

Doctor visits cost $85, she said, so "we will be really sick before we go." Lowe said she would avoid calling an ambulance except in dire circumstances.

Her fallback is no longer health insurance.

"I give it to God," Lowe said. "He will meet my needs."

You can reach Staff Writer Guy Kovner at 521-5457 or guy.kovner@pressdemocrat.com.

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