EVERETT – When Nathanael Engen went to renew his health insurance this year, he got sticker shock.
Engen, the owner of the urban mushroom farm Black Forest Mushrooms, is set to receive a 39% increase in his company’s health care premiums beginning in 2025. He pays 100% of the premium for the nine employees covered by the insurance, provided by Regence BlueShield, and called the increases “unethical.”
“That just can’t fly,” Engen said. “We have to do better. I’m here screaming from the mountaintops, asking for help as a small business for someone to listen. It’s like pulling teeth from a hippopotamus just to be able to get some traction.”
Insurers, however, said premiums had to rise because of rising medical care costs. In a statement, Regence BlueShield said it “strives to keep care affordable and efficient” by negotiating with doctors, hospitals and drug companies for the lowest possible prices.
“Health insurance rates reflect what we expect care to cost,” Regence BlueShield spokeswoman Ashley Bach said in an email. “The main drivers of the rate changes are the ever-higher prices for medical care and prescription drugs. That’s why we negotiate with doctors, hospitals and drug companies for the lowest possible prices for our members.”
In response to the potential rate hike, Engen switched health insurance providers. He moved to UnitedHealthcare, which came with an 11% increase over his 2024 rates.
In 2024, Engen paid an average of $451.31 per employee for coverage. That was set to rise to $629.02 in 2025. The average cost per member per month for Regence BlueShield plans will be $688.76 per month this year, according to the Washington Office of the Insurance Commissioner, which regulates the insurance industry. insurance.
Average rates for Regence BlueShield’s small employer plans rose 15.36% in 2025, state regulators said. That marks the company’s highest one-year rate increase for small employer plans since 2011, the records show. Black Forest Mushroom’s EmployeeChoice Gold 2000 plan was set to increase the base rate by 15.17%. The rest of the growth for Engen’s company would have come from other changes in its workforce, Regence BlueShield said.
“A renewal proposal for a small business, such as the 2025 Black Forest Mushroom proposal, can be affected not only by increases in the cost of care, but also by changes in the small business workforce, such as the number of employees , their age and number of dependents”, wrote Bach. “Because small businesses have a relatively low number of employees, these changes in workforce demographics could lead to significant decreases or increases in premiums for the coming year.”
Premiums mainly pay for medical claims and the company’s operating costs. About 83% of health insurance premiums paid for Regence BlueShield are used to pay customer claims for the insurance, state regulators said. Just over 14% goes to administrative costs such as offices, equipment and staff salaries. Regence BlueShield keeps about 2.5% as profit.
Engen also had a hard time getting health coverage in the first place, he said. Small businesses with under 50 employees are not required to provide health insurance. Any company with more than one employee, however, is eligible for employer-sponsored health care coverage from Regence BlueShield, Bach wrote.
In a report released last August, the Office of the Insurance Commissioner in Washington studied a number of policies that could lower insurance costs. One is reinsurance, where state and federal funding would cover some high-cost claims. Others included raising the medical loss ratio standard, requiring insurance companies to spend more on claims, or using reference-based pricing, which links the prices of certain types of medical care to a percentage of insurance rates. Medicare reimbursement.
Some other options raised by the regulatory office included regulating prescription drug prices or introducing a public option, a government health care insurance program that would compete with private insurers.
Will Geschke: 425-339-3443; william.geschke@heraldnet.com; X: @willgeschke.