ATLANTA - A $250 million hole in the state's health benefits program means insurance premiums for Georgia state employees, retirees and school personnel could rise sharply, a newspaper reports Wednesday.

The Atlanta Journal-Constitution reports that the costs could rise by as much as 67 percent for those employees if the state makes up the recently discovered shortfall using only premium increases. That would mean an extra $100 to $200 or more per month for many.

House Speaker David Ralston told the newspaper Tuesday that House leadership learned last week of new calculations by state budget officials showing the shortfall in the $3 billion program. The hole will happen in the fiscal year that begins July 1.

"It was a surprise," Ralston said. "They laid out a scenario that is very troubling. That's why this is an issue that we've had to focus on over the last couple of days."

The State Health Benefit Plan insures 692,000 state workers, agency retirees and dependents, as well as school system employees. The state is a self-insurer, which means it provides money for the fund and pays the health insurance claims itself. Employees now pay about 25 percent of the cost while the government covers the other 75 percent.

Plan officials warned last year of shortfalls after budget cuts helped cut a surplus that stood at about $472 million in 2008.

Bill Tomlinson, a retired former state budget director, said the average retiree on a state pension makes about $28,000 a year and can't afford to pay an additional $1,200 or $2,000 a year in insurance premiums.

"I think it is atrocious because they have known they were going in the hole for a year," he said. "It's another huge hit for retirees."

The governor's budget proposal for the upcoming year included a 10 percent premium increase and other plan changes.

Because of the state's long-running budget shortfalls, state employees haven't gotten cost-of-living pay increases for several years. But, as in the private sector, their premiums have steadily risen.

Ralston said House leaders have been trying to find ways to fill the hole without big premium jumps.

"The obvious take is that somebody's got to pay," he said. "The reserves are gone. Somebody has got to pay and it's either got to be the employer or the employee. We are going to find a solution, but it's a daunting challenge right now."