LOUISVILLE — Prices for utilities and gasoline aren’t the only ones rising at alarming rates. Health insurance rates are going up, too, and for some, skyrocketing. Small business owners are being especially hard hit as rate hikes may force some to switch plans and others to drop coverage altogether.

Bruce Glazer owns and operates his Louisville-based maintenance company, Mile High Service, as a sole proprietor. Several years ago, a policy that covered himself and his wife cost $266 a month.

“It went from $266 to $323; that wasn’t too bad, ” he says. “But the last (increase), about two months ago, went from $323 to $500. And my insurance wasn’t all that great.”

Glazer called his health insurance provider for an explanation on the rate hike. The answer they gave, says Glazer, was simply that “everyone is going up.”

John Rush faces a similar climate of rising prices and few choices as he struggles to provide health insurance to his employees. He owns the Rush 4×4 Center near Boulder, and is proud to note his repair shop and accessory outlet provides health insurance to all employees. But that comes at a steep cost to Rush, and it’s getting steeper. He recently swallowed a rate increase of 25 percent, watching premiums jump from $450 to $600 for each worker with a family.

Like Glazer, Rush was given little, if any, reason for such a large hike. “We actually did some shopping around, even changed carriers to keep it at a 25 percent (increase.) If we had stayed with our original carrier, it would have been up probably 50 percent.”

Not only did Rush dig deeper to pay for the insurance, he and his employees had to accept a benefits package that covered less than before. And when it comes time to filling open positions, Rush admits that the cost of health insurance, along with other benefits and taxes, may keep him from a making a hire he otherwise would make.

Though Rush and Glazer received little warning and even less reason for rate hikes, there are several factors behind the increases, says Deborah Collette.

Collette, public information officer for Colorado Division of Insurance, says higher drug costs, an aging population, and the regulatory climate in the state all contribute to the rate hikes.

“Pharmacy costs are rising very, very fast,” Collette says. Combine that with an aging population that makes greater use of the health-care system, and costs will rise, she adds.

Collette also points out that premiums are rising in the individual and large group market, so small businesses aren’t the only ones being hit with higher costs. Big companies are being with big rate hikes, too.

She adds that individuals who are healthy can buy individual policies, and those who are not can either buy individual policies or small group coverage. Often, those with health problems will be rejected for an individual policy, but, because of state law, insurers must cover them in a small group policy, at rates similar to healthy buyers, and this drives up rates for all workers in small groups. (Colorado defines small groups as companies with two to 50 employees.)

All this leads to a situation where health-care cost is “the number one problem facing small business,” according to Tim Jackson, a spokesman for the Denver office of the National Federation of Independent Business.

As for solutions to the dilemma, Jackson believes “we’re not going to solve the problem by beating up insurance companies,” and instead says the NFIB wants to see less regulation and more choice in the marketplace. One regulatory change, proposed and later killed in the state Legislature this year, would allow insurers to charge higher rates to sick individuals getting insurance as a small group (or “group of one”), and charge less for healthy ones.

The NFIB also says wider use of Medical Savings Accounts, or MSAs, could help the situation. MSAs allow individuals to buy high-deductible insurance, and save funds in a special, tax-favored account to pay for medical expenses during the year.

Opponents of both MSAs and changes in regulations believe both would leave to less coverage of unhealthy workers.

Still, many see little relief from rate hikes and worry how it will affect the health of small business and workers in small business.

As Bruce Glazer notes, he can still afford to pay his insurance. But for others, he worries. “It’s people that do make $7, $8 an hour — unless they’re getting (health insurance) from their job, which I doubt, how are these people going to get health care? It’s an insane thing; it’s going to come down to the rich have the coverage and the poor and middle class do not.”