"When an insurance executive stands up and warns people about insurance prices, we know we're in trouble," somebody in the audience joked.
Greg Smith laughed. It was true. As CEO of Mountain State Blue Cross/Blue Shield, he came to a state conference of personnel directors to tell them they are in deep trouble.
In fact, Smith wants to wake up the whole state. He's worried.
"I believe that prices will hit very high levels in West Virginia more quickly than they will anyplace else in the country," he told the personnel directors.
Several people sighed. One man put his head in his heads.
In the hallway before Smith spoke, one person after another said companies have been cutting benefits and raising deductibles and co-pays for several years, trying to keep ahead of health care bills, struggling to find ways to keep employees insured.
"It's an incredibly painful process for many of our members," said Tammy Perkins, president of the state Society for Human Resources Management.
"We've all been searching for that magic bullet that doesn't exist for some time now," said John DeLawder, director of human resources at Fairmont's Institute for Scientific Research. "We don't want to drop insurance, but so far, all we've been able to do is juggle the costs around between employers and employees. It's frustrating at best."
State insurance premiums will probably double within five years if health care costs keep rising at the same pace, Smith told the group. "People need to know this, while there's still time to do something about it."
If that happens, a family health insurance policy would cost businesses $16,000 four years from now, he said. The room went very quiet.
These are surprising messages for an insurance executive to be delivering. Smith, a Lincoln County native, says he has no choice.
Mountain State Blue Cross/Blue Shield has just had four solid performance years. The company insures more West Virginians than any other company. Its premiums are among the state's lowest, according to the Insurance Commission. As a regulated non-profit, the company can't play the stock market, so it didn't get hammered there.
But Smith is looking five years down the road. "I'm trying to get people's attention and say, 'Look. Don't wait till this gets so bad, most people can't afford insurance.'"
This is no time to relax, he said. Health care costs are rising faster and higher in West Virginia than they are in most other states. They slowed slightly in the first quarter of 2003, but the Insurance Commission says no conclusions can be drawn from three months of data.
Smith believes many West Virginians are at risk. He believes his 814-employee company is at risk. If prices double, most customers may no longer be able to buy insurance.
How bad is it? Since 2000, at least 24 insurance companies have stopped writing health insurance in the state. Most are still selling in states where they make more money. Others have gotten out of health insurance entirely.
Thirteen companies are still writing new health insurance policies in West Virginia, according to the Insurance Commission.
But Mountain State Blue Cross/Blue Shield can't leave. Based in Parkersburg, it is chartered as a West Virginia-only company.
"West Virginia is our only market, and health insurance is our only product," Smith said. "We couldn't leave if we wanted to, and we don't want to. We sink or swim with everyone else."
Smith knows many people are suspicious of insurance executives. He knows they think insurance companies jack their prices up to cover stock market losses. Some have, he says. "Commercial companies, particularly the malpractice insurers, lost a ton of money in the stock market," he said. "And that's part of the reason they've had these terrible increases in the past few years."
He refers people to the Insurance Commission, which examines Mountain State's financial statements each year. Mountain State prices are quite close to actual costs, they say. "I know we're taking a risk, talking about high prices," Smith said. "But the risk of doing nothing is greater."
In the past year, Smith has made dozens of presentations to legislative committees, doctor groups, Rotary Clubs and insurance agents, trying to sound the alarm. He's not sure who's listening.
"Everybody knows it's a problem," he said. "Everyone knows it's getting worse. But they say, 'I don't have time to deal with it now. I've got my own problem.'"
He doesn't want the government to take over more of the health care system. He knows the Wise administration is putting together ideas that require government action. Some would involve potential private insurance customers.
The problem is too big for the private or public sector to handle alone, he told the personnel directors. "We're not going to have real solutions until all the players in this system can sit around the table and say, Look, if we're going to save this private health care system, we're going to have to give a little, sacrifice a little, and maybe have to accept some things that we're not crazy about."
It's not clear that everyone is willing to do that.
Last winter, Smith gave his talk to a group of doctors. Seven or eight approached him afterward. He thought maybe they'd express concern. Instead, he said, they wanted to tell him Blue Cross should pay them more for certain medical procedures.
"They didn't really get what I was saying," he said.
The personnel directors got it. Many wrestle healthcare cost problems every week.
As he spoke to them, Smith paced back and forth, flipping slide after slide onto the screen, comparing West Virginia to Ohio. Ohio residents pay lower premiums than West Virginians, he said. So do people in most other states.
A 45-year-old Ohio man would pay $160 a month for a standard policy with a $500 deductible. If the same man lived in West Virginia, he'd pay between $229 and $337 a month for the same kind of policy, depending on the company.
Smith's message: West Virginians may not be able to force international pharmaceutical companies to stop charging enormous prices for prescription drugs. Maybe we can't make technology companies charge less for medical equipment. Or make doctors cut their fees. Or change the fact that drug companies can now advertise on television.