Galveston Council Discusses Health Insurance Costs and Future Debt Budget Implications

During a recent Galveston City Council workshop, a significant discussion centered around the city's self-funded health insurance program, revealing the complexities and costs associated with employee health benefits. Council members expressed concern over the rising expenses, which average between $1,100 and $1,400 per employee per month. The city currently pays a capped premium of $75 for individual coverage, but costs escalate for family plans, leading to a total annual expenditure of approximately $13 million.

City officials explained that as a self-funded program, Galveston bears all health-related costs, which can fluctuate based on employee medical needs. This model, while initially deemed cost-effective, has raised questions about its sustainability, especially as the city anticipates a 20% increase in costs year-over-year. The council is considering future bids for health insurance to explore potentially more affordable options, including state-subsidized plans.

Additionally, the workshop highlighted the city's financial strategies regarding debt management. A proposed $60 million bond election was discussed, which would necessitate a tax increase. Officials clarified that while the "no new revenue" rate remains unchanged, any increase in debt would require reallocating funds from maintenance and operations, potentially impacting essential city services.

The council's deliberations underscored the need for careful financial planning as Galveston navigates rising health insurance costs and prepares for future infrastructure investments. The outcomes of these discussions will play a crucial role in shaping the city's budget and service delivery in the coming years.