Advisers: Keep Lewis County self‑insured; Milliman projects 13.5% rise in 2025–26 costs

Susie Phillips, a consultant with Gilroy, Kernan & Gilroy, told Lewis County officials that Milliman projects claims and expenses for the county’s self‑insured health plan will rise about 13.5% for the 2025–26 plan year to roughly $16.6 million and that a fully insured contract would be materially more expensive.

That projection, Phillips said during a county presentation, assumes an average enrollment of 621 and blends a 5.3% medical trend with a 12.2% pharmacy trend. She told officials the county’s eight‑month experience for the current plan year shows a 102% loss ratio — a negative variance of about $251,000 — but noted a large pharmaceutical rebate and four remaining months could change the final year outcome. “So it’s not over until it’s over,” Phillips said.

The difference between fully insured proposals and the county’s projected self‑insured cost was stark in the consultant’s summary. Phillips said Excellus BlueCross BlueShield and other carriers responded to a county RFP; several carriers declined to quote, and UnitedHealthcare and Emblem missed the submission deadline. Excellus provided both fully insured and estimated fully insured rates that include a domestic tier tied to Lewis County Health System. Phillips said the county’s comparison of total annual fully insured premium to Milliman’s projected self‑insured cost showed about a $4 million disadvantage for fully insured options.

Why it matters: a higher bill for health benefits would increase county budget pressure and affect reserve planning. Phillips reminded officials the county aims to hold a health‑plan reserve near $3 million and expects cash infusions from Lewis County Health System and a pending New York State shared‑services savings reimbursement, which she estimated at close to $2 million.

Phillips reviewed assumptions and expenses embedded in Milliman’s renewal evaluation: claims are the dominant cost; agreed administrative fees are set at 2.8%; and the county’s preliminary stop‑loss renewal reflects a roughly 32% increase. She said Milliman’s projection does not assume any potential plan‑design changes currently being negotiated with the union and that those changes would create a cushion if they pass.

County staff and consultants outlined three main approaches to limit future increases: (1) negotiate and implement plan‑design changes with the union (a package that includes a more restrictive pharmacy formulary and other copay tweaks); (2) pursue administrative and operational savings that do not require union approval, such as a dependent‑eligibility audit; and (3) increase utilization of existing cost‑management programs, including the KianaRx international prescription program and specialty‑drug arrangements. Phillips said a formulary change with Excellus could drive roughly $250,000 in savings if adopted.

Phillips also explained the financial difference between self‑insured and fully insured arrangements: in a self‑insured plan the county pays actual claims and fixed fees (administration, stop‑loss, consulting), while a fully insured carrier builds in margin, reserves and broker commissions, which raises premiums. “In a fully insured environment, you’re transferring all of the risk to the carrier,” she said, adding that if the plan performs better than expected in a self‑insured model, “that money…stays with you, the county.”

Board members pressed for detail during a question‑and‑answer period about historical projection accuracy, tiering options for premiums, and retiree coverage. Phillips said the historical loss ratios had been above 100% in prior plan years (111% in 2022–23, and a similar pattern the next year) and noted that moving post‑65 retirees to a fully insured Medicare Advantage plan through the Broome County Purchasing Alliance reduced current‑year enrollment and lowered plan cost by about $1.4 million for the comparable period.

The presentation closed with a procedural move: a board member moved and a second was recorded to enter an executive session to discuss the legal effects of board decisions and negotiations. The board voted to enter executive session and invited the county’s board of managers and named staff to remain for the session.

The county will submit any agreed plan‑design changes to Excellus by an April 1 deadline for implementation timing; officials continue to solicit stop‑loss market quotes and await the state shared‑services reimbursement decision.