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Employee insurance fund shows rising pharmacy costs; county may need infusion next year
Summary
County insurance fund presenters told the Finance and Budget Committee that pharmacy costs continue to exceed medical claims and that a stop‑loss policy and reserves are in place but may not fully cover rising costs next year.
County employee benefits staff reported to the Finance and Budget Committee that the county’s self‑funded insurance fund is seeing continuing upward pressure from pharmacy costs and that plan funding is running short of projected needs for the year.
An insurance fund representative identified in the meeting as Mr. Angel presented cash‑flow figures. He said the fund’s total cost for May was $730,015.89 and that June’s costs were slightly higher. He reported a significant prescription‑drug rebate of about $233,000 that reduced net cash outflows for the month.
“We continue to see higher pharmacy than the medical,” Angel told the committee. He explained that chronic prescriptions often recur monthly and produce rebates, while acute medical claims (for example, hospital stays) do not generate rebates and are often one‑time but costly.
Angel said the current plan funding shortfall for the year is about $402,000 but noted the county has that amount reserved. He recommended the county consider higher stop‑loss attachment points and potentially higher reinsurance costs when planning the next fiscal year’s budget. Comptroller Sherman later reiterated that the insurance fund is the one account the administration expects could require a budget infusion depending on trend lines into the fall.
Ending: Committee members were given the data and invited to ask further questions; no formal action was taken during the meeting.
