District health-plan costs rose about 0.5% year‑over‑year; pharmacy rebates and network changes cited

The district’s employee health plan produced modest cost growth in the full 2024 plan year, a presenter told the Finance, Insurance and Section 16 Lands Committee.

Mister Lynn Fontaine, presenting the group-health claims report, said total claims for the plan year were $78,027,003.78. Medical-claim expense increased about 1.7% year‑over‑year; prescription-drug costs were essentially flat after rebates. Pharmacy rebates increased from $3,849,000 to $4,237,000, an increase Fontaine described as “big” and a positive driver of plan stability.

Fontaine attributed much of the favorable outcome to network discounts, retention of the UnitedHealthcare network, the district’s Medicare Advantage option for retirees and pharmacy-contract work that boosts rebates. He said fixed administrative costs were low relative to fully insured alternatives — allowing about $0.95 of every premium dollar to go toward claims rather than administrative overhead.

The presenter noted that high-cost specialty medications (for example, certain biologic anti‑inflammatory drugs) accounted for a large share of drug dollars but had decreased in cost year over year. He also said per-employee-per-month figures rose by about 0.9% since 2020 and that, when including reinsurance receipts received in January, the year-over-year cost increase from 2023 to 2024 was roughly 0.5%.

Board members asked questions about drivers of the change in prescription costs and how long the presenter had served the district. Fontaine answered that the trend reflected member stability and therapeutic switching to lower-cost alternatives rather than a pharmacy change. Fontaine noted more than 30 years of service to the school system.

The presentation was informational; no committee action was recorded other than receiving the report into committee discussion.