Argus Group Holdings Ltd is to adopt a more customised approach to health insurance which could result in higher premiums for groups seen as likely to make more claims.By law, health insurers in Bermuda must charge the same for everyone for the most basic level of health insurance. But for insurance that goes beyond that, insurers can vary their prices.At the same time, Argus is seeking to work more proactively with employers to help them tailor health insurance plan to their situations. The insurer believes that in many cases it will be possible to cut costs, by focusing on coverage that is necessary, while trimming some of the “frills”.The company, which provides health coverage to around 22,000 people on the Island, is holding a breakfast meeting with around 50 of its group health insurance clients this morning to explain how it would like to work with them on health insurance.From this month health insurance premiums are rising. The basic level of care will rise by the 6.8 percent approved by the legislature in March. Medical inflation continues to far outstrip general price rises, adding to health insurance burden on employers.Last year the total cost of Bermuda’s health care system was $557 million. Between 2004 and 2010, the cost of the minimum health insurance coverage grew at an annualised rate of 12.6 percent.As a proportion of expenses, this year’s increase is even more painful in the context of a tough business environment in the ongoing recession. The situation calls for a new approach, according to Argus.“The level of coverage in Bermuda is one of the best in the world,” said Argus executive vice-president, group insurance, Michelle Brock Jackson in an interview. “We’ve come to expect that we have access to unlimited care at the some of the best facilities in the world and it’s all covered.“That comes at a cost, which was more affordable when the economy was better. We understand that it’s expensive and we want to work with our clients to help them tailor a plan to their needs.”The reality is that, with medical inflation still high, as new technologies and treatments are developed to make more treatments possible for an ageing population, combined with an economic downturn, current healthcare costs are unsustainable and unaffordable for many companies.Key issues, she said, included whether coverage providing unlimited visits to world-renowned facilities was necessary and whether limiting choice to less renowned institutions capable of delivering better value for money was acceptable.Argus is also seeking to link premiums charged to the likelihood of claims within groups, based on factors such as demographics - olders groups will tend to use more health care than younger groups, for example - and the past level of claims of a group.This gives companies more incentive to encourage staff to lead healthier lifestyles to reduce the incidence of largely preventable diseases like diabetes and heart disease and also to ensure staff undergo regular medical check-ups to catch problems early.Ms Brock Jackson said that continuing medical inflation was a “reality we have to live with” and that Bermuda was not unique in this respect.“We have to be very cognisant of what we can do, looking at cost savings and efficiency in our industry,” she said.Argus chief executive officer Alison Hill said the National Health Plan, published earlier this year, “was seeking to deliver more for the same amount”.She added: “If you look at the OECD statistics, Bermuda spends a considerable amount of money on health care, without getting better medical outcomes in terms of life expectancy.”The focus of the whole industry was now on removing unnecessary costs from the system, Ms Hill added.