At a time when groceries and gasoline are getting more and more expensive, workers for a local community services agency learned this week about another challenge: a big increase in their health insurance costs.

There were a few gasps at a lunchtime meeting as administrators for two Focus On Renewal groups, the Sto-Rox Neighborhood Corp. and the Sto-Rox Family Health Center, outlined to about 40 employees just how much those costs will be going up.

Neighborhood Corp. employees face the biggest increases beginning July 1, with monthly premiums for single coverage rising from a current low of $151 a month to at least $329. Premiums for family coverage will rise from at least $824 a month to $1,388. That's not counting a higher deductible for certain services such as hospital care, diagnostic tests, and diabetes and cancer treatment.

Stories of smaller companies struggling with the high cost of health insurance are all too familiar, said Rosanne Placey, a spokeswoman for the state Insurance Department. Those businesses have relatively few people in their insurance pools, and expensive medical claims by even a few enrollees can lead to dramatic spikes in the cost of coverage.

With prior treatment for skin cancer and a history of cancer in her family, Sue Stiffler, program director for the Neighborhood Corp.'s Early Head Start program, felt she had to consider the more expensive insurance offered by her company.

But Ms. Stiffler, 55, of Bethel Park, questioned how workers could be asked to shoulder such increases "out of a paycheck that's not huge to start with." Corporation workers earn an average of $13 an hour, said Ed Hahn, the group's finance director.

The higher insurance costs also are a bitter pill for officials at Focus on Renewal, an organization dedicated to providing health care and social services to people in need.

Rev. Regis Ryan, the group's executive director, worried that some workers would simply drop their health insurance. As of yesterday, about eight corporation employees planned to do so, Mr. Hahn said.

Officials said they had no choice but to pass on rate increases from Highmark that, so far, have been the best deal they could find.

The rising cost of health care is part of the problem, but regulatory reforms also are needed to make health insurance more affordable for small businesses, Highmark spokesman Michael Weinstein said.

Pennsylvania and Hawaii are the only states, along with the District of Columbia, that have not significantly reformed their small group marketplace, Ms. Placey said.

A report released earlier this week by Families USA identified similar problems in the individual insurance market in Pennsylvania and other states. The report was released locally at a small rally at Mellon Square, Downtown.

"The good news is that solutions are out there," said Jessica Seabury, executive director of the Consumer Health Coalition, as demonstrators held signs reading "We Need Health Care Now" and "Affordable Health Insurance - Yes."

In April, the Pennsylvania House approved legislation aimed at curbing the cost of insurance available to individuals and small businesses. Among other provisions, the measure would limit the ability of insurers to consider health history in setting rates and would require insurers to spend 85 percent of premiums on health care. Individuals seeking to enroll in a plan could not be refused coverage.

The bill has been stalled, however, in the Senate Banking and Insurance Committee.

Sen. Don White, R-Indiana, the committee's chairman, said he's not interested in the proposal, supported by Gov. Ed Rendell and other Democrats, which he feels would limit competition among insurers. He predicted no action on health insurance reform before the Legislature's summer recess.

He has sponsored another bill that would allow insurers with smaller shares of a region's insurance market to continue to consider health history in setting rates.

Rick Speese, executive director of the House Insurance Committee, expressed hope that the Senate would send the House any bill, and soon, to begin a serious discussion of reforms.

In Congress, Rep. Jason Altmire, D-McCandless, is among a bipartisan group of lawmakers trying to address the issue.

Earlier this week, they introduced legislation to help small businesses and the self-employed lower health insurance costs by banding together in statewide or national insurance pools. The proposal also would ban insurance rating based on health status and give tax credits to small businesses that pay at least 60 percent of their employees' health care premiums.

While increases in health insurance premiums have tended to be smaller in the past several years, the average premium increase continues to outpace worker earnings and inflation, and a declining share of small firms are offering coverage, according to a national survey of employers last year by the Kaiser Family Foundation and the Health Research and Educational Trust.