When hospital costs go up, so do the costs of health insurance. Take for example the case of a 37-year old non-smoking man seeking an individual policy. He is in excellent health. A policy for him from Assurant Health costs more in Milwaukee than it does in Indianapolis, Kansas City, Chicago, Denver, Atlanta, or Phoenix.

According to StateHealthFacts.org, in 2004 Wisconsin ranked 8th in the nation for the average cost for a single employee in an employer health insurance plan. The Badger State ranked just behind Alaska, Rhode Island, the District of Columbia, Massachusetts, Maine, New Hampshire, and Vermont. Costs in Alaska were $4,379. Costs in Vermont were $4,074. Costs in Wisconsin were $3, 927. In all these cases, the cost exceeded the U.S. average of $3,705.

What makes Wisconsin so expensive? It clearly is not hordes of unhealthy uninsured people dependent on the public purse--one of the problems sometimes cited as justification for an active government. Wisconsin has one of the lowest rates of uninsured people in the United States. The Wisconsin Department of Health and Family Services estimates that 92 percent of Wisconsin residents under age 65 are insured. Nearly all (96 percent) of children aged 0-17 are insured, and 99 percent of people aged 65 and older are insured.

For comparison, even in British Columbia, Canada, an estimated 1 to 2 percent of the population is uninsured, and this in a system that supposedly insures everyone. Increasing coverage in a system that already covers almost everyone will be extremely expensive, and may produce little of value.

One reason for Wisconsin's high insurance costs is the state of its hospital sector. I'll talk about that tomorrow.