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District health‑insurance costs surge; MOA on specialty drugs could trim next year’s increase
Summary
Business manager Keith Bartow told the board that specialty drugs and rising medical costs are driving the district’s health‑insurance budget toward an overall increase of roughly 17% year to year.
Business manager Keith Bartow and other district staff told the board that health‑insurance cost escalation is a primary driver of the 2025–26 budget gap and explained a tentative memorandum of agreement intended to limit specialty‑drug cost escalation.
Bartow said the district’s self‑insured specialty‑drug costs are running roughly 30% higher and medical costs roughly 12.5% higher year to year. “The self insured drug is about a 30% increase. The medical, is about 12 and a half. It blends out to be about 17% budget to budget,” he said. District staff showed plan‑by‑plan impacts and noted that roughly 59% of active employees are enrolled in CDPHP plans and the remainder in Highmark products; the specialty‑drug carve‑out affects Highmark members in the district’s vendor arrangements.
To address specialty drugs, the administration described a memorandum of agreement (MOA) that would move a bargaining unit onto a Highmark program the staff called the “Free Market” platform for specialty drugs (staff used that trade name in the meeting). The MOA would add preauthorization for a list of specialty drugs, grandfather current authorizations and route specialty fills through approved specialty pharmacies to lock in negotiated prices for a year (or multiple years if indexed). Bartow said the MOA does not change member copays or employee contribution levels. “There is no change in co pays or contribution of the member,” he said.
The district reported that three of six bargaining units have signed the MOA so far (Local 766, the secretarial unit and administrators). Bartow estimated that if all bargaining units agreed, the specialty‑drug agreement could reduce the district’s overall projected cost acceleration by “a couple $100,000,” noting that the savings would be limited to the population covered on the Highmark side because CDPHP already uses similar controls.
Board members asked for the financial scenarios that show how a fully executed MOA would alter levy and reduction choices. The administration said it will report potential dollar savings and the effect on overall levy scenarios at the next meeting; the staff scheduled a related bargaining/management meeting (noted for Thursday in the session) to continue discussions with units that have not signed.
No changes to plan benefits or member contributions were presented or approved during the session.
Key details to confirm: the MOA’s full list of affected drugs, the final signatory status across bargaining units, and the precise net savings in district dollars once all units decide. The administration said it would bring those precise figures to the board when the MOA and related plan change options are finalized.
