The region saw a one-year jump in the combined health-insurance costs for employees and employers of 18.4 percent. Only Memphis and Pittsburgh saw bigger increases, according to the report from Hewitt Associates, a global human-resources consulting firm - 22.6 percent and 19.1 percent, respectively.

But some experts say the region may be catching up with the rest of the country as health-care providers renegotiate contracts that were last renewed several years ago.

Hewitt projected an 11.4 percent rise for the region in 2005 .

A survey released last week by Towers Perrin, another global human-resources consulting firm, reported that employees who participated in employer-sponsored health-insurance plans could expect a 14 percent increase in their health insurance costs nationally. Among the 20 Ohio companies it surveyed, the firm estimated a 7 percent rise in costs for those workers next year.

"It is not a surprise but it is a shame," said Steve Browne, director of human resources for CDS Associates Inc., an engineering and architectural consulting firm based in Blue Ash.

"Employers are taking drastic action: everything from canceling coverage completely to very high deductibles and putting more of the cost onto employees."

Retirees see increases

Kenneth Perry, a 59-year-old Madisonville resident, is retired and on a fixed income. And he knows that health-care costs have been anything but fixed.

"Medicine is not getting any cheaper," Perry said. "That much I know.

"Health care costs have gone up tremendously since I retired in 1998. I figured it would go up some, but not as much as it has gone up."

The Hewitt study compared health-insurance rate increases from 300 employers in 189 markets and involved 2,000 health-insurance plans.

The increase identified by Hewitt is likely linked to a cycle of payments and plans negotiated among hospitals, doctors, insurers, employers and workers.

"In the recent past, hospitals and physicians were much more aggressive in their bargaining with health plans," said Sharron DiMario, president and executive director of Norwood-based Employer Health Care Alliance, a nonprofit association of 50 employers representing about 250,000 people who live in Greater Cincinnati.

"They are asking for and getting increases in their reimbursement rates. It's a catchup over what has been, in some minds, the years of lower reimbursement and payment."

That inflation is expected to continue to plague workers and companies with double-digit increases in 2005.

Region's cost up

The increased cost in the region may have come because of the number of health-care providers renegotiating compensation contracts with insurance companies.

Hewitt projects that in 2005 the rate of increase will ease just a bit to 11.3 percent. Fewer contracts will be up for renewal then.

"There's a cycle where there's tremendous push-back from the hospitals and larger doctor groups," said David F. Rinderle, benefits consultant with Cross & Associates, a Kenwood-based benefits firm.

"All major insurers are building in an expectation that their costs are going up based on contracts they've had to put in place with major hospitals and physician groups."

Lynn Olman, president of the Greater Cincinnati Health Council, which represents 34 regional hospitals and dozens of affiliates such as physician groups, long-term care facilities and health-care clinics, agreed that increases are coming now because of underpayments from previous years.

"Cincinnati was far below others in the nation in terms of premiums," Olman said.

"While our rate of increase seems to be going up faster than others, it is a catchup and not surprising."

E-mail jeckberg@enquirer.com