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Tucson examines health‑plan redesign as medical costs surge; city facing nearly $10 million funding gap in some plans
Summary
City staff outlined a near‑$10 million funding gap for two of the city’s three medical plans and asked the council to consider plan design changes, greater employee cost‑sharing and continued incentives for the HSA plan ahead of May open enrollment.
City staff presented a detailed briefing on employee and retiree health benefits on Feb. 19, saying medical cost growth — driven in part by rising prescription prices — has pushed projected plan expenses well above current premium and funding levels.
Staff reported the three plan structure — a Network plan, a Health Reimbursement Account (HRA) plan and a Health Savings Account (HSA) plan — are diverging in cost. The city’s analysis shows the Network and HRA plans together face an estimated $9,900,000 shortfall in projected costs for the coming year, while the HSA plan is projected to be in a surplus position (the presentation lists an estimated positive position of…
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