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Consultant warns of rising health-plan costs; Laredo ISD faces estimated $5 million gap for 2026 if no changes made
Summary
HUB International presented a quarterly health-plan update showing higher claims and pharmacy trend drivers; consultant estimated a potential $5 million shortfall for the 2026 plan year absent contribution or plan-design changes.
HUB International presented Laredo ISD's quarterly health-plan performance Sept. 4 and told trustees that the district faces rising claim costs and pharmacy trends that could create a multi-million-dollar shortfall for the upcoming plan year.
Patrick Avila, the consultant presenting for HUB International, reported that the district's total cost per employee per month for the recent fiscal period was $881.13 and that, with current expense trends and without plan-design or contribution changes, the district could face an estimated $5 million shortfall for the 2026 health-plan year (January'December 2026). For the fiscal year close, Avila said a shortfall of roughly $4.4 million appeared before factoring a July 1 employer contribution increase that staff noted was $77 per employee per month; after that adjustment, staff estimated a $4.2 million shortfall for the fiscal year in the consultant's scenario.
Driving factors: Avila and staff identified two key drivers: a cluster of high-cost claimants and pharmacy utilization, including increased use of high-cost GLP-1 diabetes/weight-management drugs (examples cited in the meeting included medications such as semaglutide). Through July 2025, the consultant said there were 16 claimants with costs above a $125,000 monitoring threshold; four had exceeded the district's individual stop-loss deductible and qualified for reinsurance reimbursement. Avila recommended further monitoring of high-cost cases and pharmacy trend strategies.
Next steps and timing: trustees asked when the district would receive recommendations to address the shortfall; HUB and staff said they would develop options, likely to be discussed during current budget planning and in quarterly updates. Staff suggested bringing the topic back within three months to review trends and possible contribution or plan-design adjustments. Trustees noted other local governments recently revised contributions or plan design to address similar trends and asked staff to provide comparative data.
Ending: HUB will supply updated claims data as it becomes available; staff and the consultant said they would work with district leadership to present options to close the projected shortfall before plan-year decisions are finalized.
