Few people are pitying the nation's health insurance companies, whose profits have risen by double digits since 2000 (in 2004 alone, they shot up 32%). But the picture hasn't been entirely bright. From 1997 to 1999, the health insurance industry posted losses, as the cost of developing new plans grew more quickly than premiums. And now insurers contend they're caught between steep cost increases in areas like new medical technologies and pharmaceuticals, and employers who insist they can't pay another cent for insurance. These pressures are part of the reason profit margins are stuck between 3% and 4%, less than half that of insurers in other industries. Like everyone else, health insurers are looking for a new business model. In the 1990s they thought they had found the answer -- the health maintenance organization, or HMO. "We provided first dollar coverage with an emphasis on prevention all the way to catastrophic," says Karen Ignani, president of America's Health Insurance Plans. But HMOs restricted access to certain doctors, medical tests, and hospitals, so they quickly met with loud disapproval. The plans responded by expanding networks and, predictably, costs shot right back up. "The system in its current form really is unsustainable," argues Carol McCall, vice president at Humana, one of the nation's largest health insurance providers. "Employers will say, ' Look we can't pay for this anymore. It's eating into our bottom line.' They set the parameters of choice." It is employers, increasingly, who are asking for plans that feature more cost-sharing and higher deductibles.