Pennridge SD officials recommend major premium increase as medical, drug claims surge

Pennridge SD officials on Feb. 10 presented a benefits review projecting large increases in health-care costs for the 2025–26 plan year and recommended raising employee premiums to cover most, but not all, of the projected rise.

The personnel committee heard from a consultant, Mr. Pye of Conrad Segal, who said Pennridge’s 12‑month rolling, stop‑loss–adjusted medical claims per contract per month were $1,072.69 through November 2024 — about a 21% increase from the prior 12 months — and that prescription trends were about 17% over the same period. "When we compare the $1,072.69, the most recent 12 months to the prior 12 months ... the change ... has been approximately 21% in medical claim cost increase," Mr. Pye told the committee.

Why it matters: the consultant said combined medical and prescription claim cost increases approach roughly 20% year‑over‑year for Pennridge SD, driven by both a small number of very high medical claims (including one over $1 million and several in the hundreds of thousands) and rapidly rising spending on GLP‑1 drugs — medications used for diabetes and weight loss such as Ozempic and Wegovy. Mr. Pye said a $15,000 per‑year price tag for those drugs, even after rebates, can materially push prescription spending upward.

Nut graf — what the district proposed: based on the claim trends and other fixed fees (administrative services, stop‑loss premiums), district staff recommended the personnel committee forward an employee premium increase of 18.5% for medical and prescription coverage beginning July 1, 2025, while COBRA rates would be increased to approximately 23.5% (the consultant characterized the 23% figure as the percentage needed to reflect total projected cost). Tara Mossman, human resources, and Christine Batisky, personnel committee chair, said the committee will present the benefit chart and the recommended rates to the full board for a formal vote; committee materials indicated the chart will be used during open enrollment.

Details and context: Mr. Pye said Pennridge’s group has about 820 enrolled contracts (actives and retirees) and that stop‑loss protection is in place with a specific deductible noted in committee discussion at $225,000. He described the financial dynamics of stop‑loss reimbursements — some years returning far more than premiums paid, other years less — and said medium‑sized claims below the stop‑loss threshold can nonetheless push up year‑to‑year trends. The district’s stop‑loss carrier is preparing for renewal and is collecting additional data from Independence Blue Cross and CVS.

Costs to the district: Mossman said moving employee rates to the recommended 18.5% increase would still cost the district about $1.5 million from the general fund next year as the district bridges to the higher true cost. Mossman described the district’s health fund balance as “relatively healthy,” noting it covers roughly eight months of expected claims and that the fund balance is about $11–$12 million (figures discussed in committee). The district said it plans to phase increases to avoid depleting reserves quickly.

Prescription drivers: Mr. Pye said GLP‑1 medications are a major driver of the prescription trend across many school districts he consults with. He noted Pennridge receives rebates from its prescription contract that help offset costs — for very high cost drugs rebates can be about one‑third of the list price — but widespread uptake for weight‑loss and diabetes indications has raised spending.

What was decided and next steps: the personnel committee agreed to present the recommended rates and the benefit chart to the full school board. Committee members discussed that the 18.5% recommendation intentionally leaves employee rates about 5 percentage points below the actuarial target to allow a phased approach rather than immediate full catch‑up. The committee scheduled the board vote on the rate change; staff indicated new premiums will be shared with employees during open enrollment materials if the board approves them.

Who spoke: Christine Batisky, chair of the personnel committee; Tara Mossman, human resources; Mr. Pye, benefits consultant (Conrad Segal); Jim (staff member credited with noticing data); plus other committee members who asked clarifying questions.

Ending note: committee materials and the consultant emphasized uncertainty: actual 2025–26 trends could differ materially, and the district will monitor stop‑loss and prescription data in the coming months to refine renewal assumptions.