In the perhaps biggest sign yet that premiums are poised to soar, the California Public Employees' Retirement System has granted the health plans it contracts with an average 9.7-percent rate hike for next year. It's the highest increase since CalPERS accepted a 12-percent boost in '92. CalPERS is the nation's second-largest health care purchaser.

Kaiser Permanente, CalPERS's biggest contractor, got an 11.7-percent hike. Kaiser and CalPERS engaged in a public showdown last year, when the HMO asked for a 12-percent boost. It finally settled for 10.75 percent.