The Kansas Health Policy Authority says health insurance premiums for state workers will probably rise for at least the next two years.

The agency said Tuesday that rates for 90,000 state employees and dependents will go up 7.5 percent on Jan. 1 in conjunction with expansion of deductibles and co-payments. The state will absorb a 12.5 percent premium spike.

Authority chairman Joe Tilghman said the change “doesn’t seem that bad” compared to sharper increases in national health care costs. Fee and benefit changes will leave the state insurance program with $33 million in a reserve account at the end of 2010, but officials acknowledge the ending balance should be $68 million.

KHPA health plan director Doug Farmer said the state’s insurance fund would be insolvent by the end of 2011 without far more aggressive policy changes.