SEATTLE - Regence BlueShield, Washington state's largest provider of individual health care insurance, is raising premiums for 135,000 individual plan members in the state by an average of 17 percent on Aug. 1.

It's the third consecutive year that Regence has boosted rates by double digits. Recently, two other major insurers, Group Health Cooperative and LifeWise Health Plan of Washington, also imposed steep premium increases.

State insurance regulators, who last year regained authority to reject potentially excessive rates on individual policies, have concluded that the latest premium requests were justified and left them virtually untouched.

Terry Naughton, of Quilcene, and her husband face a 40 percent jump next month in Regence premiums. Their payments will climb to $648 a month, in part because he turned 60 and moved into a higher age bracket.

"We're trapped. We pretty much have to pay it," Naughton said.

Jonathan Hensley, Regence's president for Washington, said the increases reflect the company's costs, which include higher medical claims, inflation, prescription drugs and the expenses of treating an aging and less-healthy population.

As a nonprofit company, "we don't raise premiums more than we have to," Hensley wrote in an e-mail to The Seattle Times. Hensley said Regence is losing money on its individual plans and subsidizes them with earnings from its group plans.

Kathleen O'Connor, a Regence customer and founder of CodeBlueNow!, a Seattle nonprofit concerned with health care reform, contends that lack of competition among insurers is one reason for surging premiums, particularly for the self-employed and others who must buy coverage on their own.

Insurers "get away with rate increases in this market because they can," O'Connor said. "I'm not sure why the insurance commissioner is not all over these rate increases."

Stephanie Marquis, spokeswoman for Insurance Commissioner Mike Kreidler, said claims and other data submitted by the insurers supported the increases they sought.

Kreidler rejected a proposed June rate increase for individual plans from Premera Blue Cross that would have averaged 9.6 percent, but accepted an increase averaging 6.1 percent. He let stand all other requests, approving an average boost of 13 percent at Group Health and 17.6 percent at LifeWise, a for-profit arm of Mountlake Terrace-based Premera.

"Under the law, if the rates can be justified, we have to accept them," Marquis told The Times.

Some customers are switching to cheaper health plans, said Deborah Huntington, vice president of sales at Seattle's Group Health.

Last year, Group Health introduced eight products to join its lineup of a dozen individual health plans. By catering to different population segments, Group Health in the past 15 months has nearly doubled its individual-plan members to 36,000.

But those new customers are facing a 13 percent rise in premiums because Group Health underestimated anticipated medical claims, said spokesman Mike Foley.

Gail Petersen, of Seattle, said having more choices won't make health plans any more affordable.

Petersen, 55, and her husband pay more than $1,400 a month to Regence to cover their family of five and will pay $300 more starting in August.

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