The state's health-care plan lost almost $4 million last year, and while the plan still shows a surplus overall because of past surpluses, premium rates will have to go up by 35 percent this next year if it is to break even.

The state pays 90 percent and state employees 10 percent of the state's self-insured health-care plan. Premiums went up 15 percent this year, Legislative Fiscal Analyst Leo Memmott told legislative leaders Monday afternoon, and will have to go up again to cover the escalating health-care costs.State employees hope for a pay raise in 1989, and Gov. Norm Bangerter said Monday that there may be enough money for a small raise. Senate Majority Whip Dix McMullin, R-Sandy, asked Memmott to figure out what a 35 percent premium increase - of which the state will pay 90 percent - means in cash terms. "If that equals a 1 percent pay raise, we should tell the employees that," McMullin said.

Memmott said the plan isn't on the verge of collapse. "The plan has several parts. The long-term disability part has a $4 million surplus. But the basic health-care part had a $3 million surplus a year ago and it lost more than $6 million this past year. That's where the real shortfall comes."