Bermuda, according to health insurers, is teetering on a crisis.

Health care costs are rampaging out of control, which means that insurance premiums are leaping to cover the costs. When the premiums shoot too high, what then?

Most people in Bermuda have insurance coverage through their employer. Last week both BF&M and Argus, the two largest private health insurers on the Island, admitted that while no one has actually dropped benefits yet, many employers are already asking: If they had to in order to cut costs, could they?

The answer is yes, they could.

Employers in Bermuda are required by law to provide their employees with hospital coverage: essentially, the public ward rate for room and board in the hospital. That's it. They are not legally required to cover optical, dental, prescriptions, overseas medical care if it exceeds the cost of public ward care here in Bermuda, diagnostic and preventative care (such as the annual check-up with a GP), or any hospital charges which do not fall under the Hospital Insurance Act.

Very few in Bermuda can afford to lose those benefits. Despite being one of the wealthiest countries in the world, the combination of the high cost of living, soaring rents, and leaping health care is already proving too much for some, with both Argus and BF&M citing seniors who are foregoing food on the table in order to pay for medicine ? and that's with coverage above and beyond what is required by law.

Over the last three years the average cost of health care in the US has increased by about three to four times the rate of inflation.

Workers' earnings are increasing fairly evenly with inflation, at about three percent a year. In the US, premiums have increased by 11 percent to 14 percent in the same period.

There is a huge gap: employers and employees are spending more and more on health care, but compensation is not being increased at the same rate.

Bermuda's costs are increasing at a similar rate.

"Costs are ballooning at a rate that is not only out of control in many countries, but it is leaving huge portions of the population behind," BF&M president and CEO Glenn Titterton said. "An increasing number of people are not going to be able to afford the treatment they expect to receive.

"This is something that should be on everyone's radar."

Newspaper articles from 1993 warned of costs increasing in Bermuda. The bad news is that all predictions say health care cost trends will continue to increase in the double digit range for the foreseeable future.

The good news is the increase can be slowed down. To do so, however, people must understand the forces driving the cost of health care.

Essentially, there are five factors:

The cost of prescription drugs;

Increased utilisation of health services;

Advances in medical technology;

Greater life expectancy; and

A population which overall is far less healthy than in days gone by.

Prescription drugs alone are a huge factor.

Pharmaceutical companies are now allowed to advertise their products, and do so, as the plethora of drug advertisements on prime time TV attests.

"Take a night, any night on TV," suggested BF&M vice president of technical services Gina Bradshaw. She estimated there are probably twice or three times as many ads for drugs than for anything else. "It's absolutely incredible.

"So now people are going to their doctors and asking for these drugs by name, saying I think I need so-and-so ? and that costs."

The difference between the cost of name-brand drugs and their generic counterparts is easy to see ? go to any pharmacy and compare the prices of Bayer with generic aspirins on the shelf below it. Bayer easily costs twice as much.

There's nothing wrong with that, Mr. Titterton added ? it's business. It's also impossible to fault doctors or drug companies for doing everything they can to make patients well. "But the bills have to be paid."

There are also more and more new drugs on the market, drugs which can treat diseases that were previously untreatable.

"We have drugs that can treat schizophrenia, depression," said Argus vice president of group insurance Cindy Campbell. "These are wonderful things."

But there's a price tag.

There has also been a huge increase in "lifestyle drugs" ? drugs that may not be saving your life, but that can enhance your lifestyle ? like Viagra.

In fact, at a recent conference, futurist Dr. James Canton of the Institute for Global Futures said that last year Americans spent $1.8 trillion on lifestyle drugs ? a number he predicted would reach $3 trillion by 2010.

Argus does not cover drugs for erectile dysfunction. Even so, Ms Campbell said, at Argus payments for prescription drugs have leapt up 40 percent since 2002.

Secondly, while people are demanding drugs (particularly name-brand drugs) more than they used to, they are also utilising medical services far more than they used to. The combination of more doctors on the Island and more available services ? like the two MRI machines ? plus changing attitudes towards health care all have an effect.

The Second World War generation, Ms Campbell explained, viewed aches and pains as signs of ageing. Today, however, people know there is treatment out there for whatever their ailment, and they expect the same quality of life all the way into their 80s and 90s.

For that reason, the utilisation of medical treatments is leaping. "All we can say is, wow, people are going to a lot of doctors," Mr. Titterton said.

Insurance companies have the ability to quantify how often services at the hospital are being used as the hospital fees are legislated. For example, at Argus, hospital payments have increased by 27 percent since 2002, or an average of $1.9 million per year. Of that, $700,000 is attributable to increases in hospital fees.

That leaves $1.2 million per year which, it seems, can only be attributed to increased utilisation.

"All these new things are wonderful and should be done," Mr. Titterton said. "But somebody has to pay the bill. Every time someone uses their insurance to get something done, it's not free. It does cost."

Advances in prescription drugs and greater utilisation add up, and advances in medical technology also do their part. "We can save lives that never would have been saved before," Ms Campbell said.

For example, a premature baby who almost certainly would have been unable to survive ten years ago can be saved today ? but may become known as "a million dollar baby", because that can be the price tag attached.

That million dollars is a cost which must be spread out in insurance premiums, ensuring that everyone pays ? a necessary fact. After all, Ms Campbell said, how can you put a price on health care?

"Your automobile can be written off; a human life cannot ... Nobody wants increased premiums, but everybody wants the absolute best care when they or their loved ones are sick."

Advances in medical technology have also led to far greater life expectancy. In fact, two of the world's most distinguished gerontologists have made a bet, with one believing children of today will live to 130 years old, while another believes they will reach 150. The pair have each put $150 in a trust fund and, in the year 2150, the heirs of the winner will collect the jackpot ? expected to be around $50 million.

With the increase in life expectancy, however, there is a natural increase in the need for health care. It is not unreasonable to suppose that the older you get, the more health care you will need ? and as people continue to get older, they will both need and use more health services. That, also, drives up health care costs.

Finally, insurers noted, as a population Bermudians are far less healthy than they used to be.

"We exercise less, we eat more, we have more additives in our food," Ms Campbell said. "The only way health care costs are going to go down is if people start living healthier lifestyles.

For example, the cost of one person going overseas for a minor heart procedure can run between $30,000 to $50,000, Ms Bradshaw said ? costs which are then spread among everyone.

"Unfortunately, we know 80 percent of the costs are incurred by 20 percent of the people," Ms Campbell said. "The problem is, you never know who that is going to be. No one plans to have a premature child, or a heart attack, or cancer. That's why you spread the risk among everyone ? so it carries you when the unthinkable happens."

Is it that unfortunate, however? Just one less person putting themselves at risk of a heart attack by being obese, or one less person risking lung cancer by smoking, could save the overall pool hundreds of thousands of dollars.

"We have to make, as a society, the decision that we want to live healthier," Ms Campbell said. "Don't eat too much, don't drink too much, don't smoke and decrease stress."

The system needs a leader, and individual Bermudians need to be smarter about taking care of themselves, insurers said. The Island cannot afford increases to continue.

"The good news is that we can do it," Ms Campbell said. "But it will take a whole-hearted social effort.

"It will all depend: how much are you willing to pay for health?"