Lafayette Parish committee reviews Gallagher report as district eyes cost-saving health plan options

The Lafayette Parish School Board Insurance & Finance Committee reviewed a Gallagher presentation on May 6 that outlined current plan performance, cost-containment initiatives and timelines for market checks as the district confronts a projected roughly $70 million health plan cost for fiscal 2025-26.

Gallagher consultants told the committee that the plan's projected medical and pharmacy outlay for 2025-26 is about $70,000,000 and that implemented programs effective Jan. 1, 2025, are already reducing the rolling 12-month per-member-per-month trend. "Our projected number is the red number here of 69,995 or the 70,000,000 for next year," a Gallagher presenter said during the slide review.

Why it matters: the committee heard that the district currently funds around $57 million of premiums and uses about $6.6 million from the general fund; Gallagher and district administrators said additional funding in the range of several million dollars may be needed if market changes do not produce savings. Committee members repeatedly emphasized they want to avoid large across-the-board premium increases. "We're not gonna support a 25, 30 percent increase in premiums across the board. We're not gonna do that," the committee chair said during the meeting.

What Gallagher presented: consultants described point solutions and broader market checks the district is pursuing, including: - Third-party administrator (TPA) market checks to evaluate administrative platforms, selective networks and exclusivity options. - Pharmacy benefit manager (PBM) and retiree PBM (EGWIP/SilverScript) market checks. - Point solutions already implemented Jan. 1, 2025 (musculoskeletal center of excellence, steerage initiatives, other programs) that Gallagher estimates have driven projected savings of about $5.9 million in 2025. - Additional strategies under study: oncology center-of-excellence programs, telehealth navigation and a "go to the doctor" incentive campaign encouraging primary care relationships, infusion-site steering/home infusion options, federal/state benefits navigation, direct contracting with providers, and potential plan-design modeling (deductible/out-of-pocket changes) as a last resort.

Gallagher emphasized that different TPAs offer different network structures (broad national networks, narrower "select" or tiered networks or exclusive-provider arrangements), and that some TPAs can offer plans that give members a lower deductible and copay in exchange for using a narrower, lower-cost provider network. "One of the main reasons I read the questions prior to your presentation is so that you can hear them," the committee chair said at the start of public questions; a Gallagher presenter explained that "some third party administrators have certain designated networks that we can look at."

Timeline and next steps: Gallagher and district staff said the TPA market-check results will be presented at the committee's June 4 meeting; the PBM/retiree PBM work is expected to return later (consultants said July is likely if the PBM timeline cannot meet June 4). "All of these results will be brought back to the June 4 meeting," a Gallagher presenter told the committee. The committee was repeatedly told the timing reflects the need for recent claims and pharmacy data and the time vendors require to analyze and validate proposals.

Modeling and potential impacts: Gallagher walked the committee through modeling scenarios, including eliminating some plans, adjusting plan designs, or combining plan elimination with design changes. Examples shown to the committee: - Eliminating the Basic PPO (with a modeled 50/50 redistribution to other plans) reduced projected claims in the model but raised employee contributions; the net modeled savings depended on assumptions. - Plan-design-only changes (raising deductibles/out-of-pocket limits and co-insurance) were modeled to lower claims cost; consultants flagged such changes as a typical employer last-resort strategy, and district members urged caution because they disproportionately shift cost to members who use care the most.

District staff briefed the committee on administrative details: the insurance office employs seven people and serves roughly 4,200 active members and about 3,300 retirees ("technically responsible for roughly 4,200 active members and 3,300 retirees"), and legal counsel attends committee meetings because the plan is a large fiduciary responsibility. Staff also told the committee that consultant commission arrangements that previously existed have been corrected and that some past commissions will be credited to consultant fees.

Votes at a glance: - Committee accepted the Insurance & Finance Committee minutes from April 2, 2025. Vote recorded as: Edmonds, yes; (Bajero/Bajoran), yes; Hidalgo, yes. Motion carries (tally recorded in the minutes: yes 3, none against).

Discussion versus decision: the meeting was primarily informational and preparatory. No final selection of a TPA or PBM was made at the committee meeting; consultants and staff repeatedly described the work before the June 4 and (for PBM) possibly July meetings. Several board members stressed preference for pursuing market checks and point solutions before changing plan designs or raising premiums, and said plan-design changes should be a last resort.

Open questions and next public actions: consultants will return to the committee with the TPA market-check results on June 4. PBM/retiree PBM results were stated as likely in July if the pharmacy consultant cannot meet the June date. Consultants said they will bring disruption analyses for any proposed vendor changes so the committee can weigh savings against member impact.

Ending: committee members and presenters agreed the June meeting would be a key milestone for decisions or recommendations to the full board; members urged thorough, data-driven presentations and asked staff and consultants to anticipate detailed questions on cost, disruption and legal/fiduciary implications.