Victoria Colliver continues to document health insurance price hikes here in California, this time for small businesses and her latest story gives us two things to think about:

Small businesses are just as vulnerable as individuals to screening, selection and high prices for health insurance. In fact most small businesses are experience rated. Their premiums are based on their past use of insurance. They are also subject to various discriminatory tests. For example health insurers regularly refused insurance to florists for fear that one of their employees might get HIV.

If we are worried about the individual health insurance market we should also be worried about the small business market. The Senate Bill does nothing for them unless you count taxing their payments for insurance if they exceed a certain level.

Second, the current insurance pricing structure is flawed:

Those who reported the highest rate increases appeared to have a high deductible Blue Shield policy paired with a savings account.

These policies, known as health savings accounts, or HSAs, were created by the Bush administration in 2003 as way to trim health costs. The policies are supported as a market solution to rising health costs because they require members to pay more of their medical expenses out of pocket to use fewer services.

Blue Shield officials said the company's lack of experience with these types of plans combined with the poor economy compelled them to raise rates, primarily affecting three HSAs.

'Paying out more'

"We were paying out more in claims than we were collecting in premiums," said Aron Ezra, spokesman for Blue Shield, which is a nonprofit insurer based in San Francisco. Ezra said he didn't know how large the increases were or how many customers were affected.

High deductible plans are cheap on the individual market because sick people avoid them if they can. If your competitors are not offering similar plans you get the healthiest consumers. They also save the insurance company money because it does not pay for the first $6,000 of medical expenses.

When people with high deductible insurance get really sick medical bills are the same as they would be with low deductible plans. Somehow all thought of money leaves your mind as you enter the ER.

After the insurance company subtracts the substantial deductible, it should price a High Deductible small business plan like any other plan.

The employer picks the plan so you do not get healthier consumers and, even though you escape $6,000 of payments, you get no consumer cost control on the really expensive cases. But pricing actuaries - including those at Wonks Anonymous fine organization - are not capable of following such a complex train of thought. They get lost with a figure eight layout that has a tunnel,

And, frankly, it is the people who get really sick who rack up the most of the medical bills under our current fee for service system and drive health care costs.