Eau Claire board hears health-insurance update as district weighs rebate use, stop-loss options

The Eau Claire School Board on Tuesday evening received a detailed briefing on the district's employee health insurance from Dr. Elworthy and consultants with Marsh McLennan Agency (MMA), who said a recent spike in high-cost claims ' especially specialty pharmaceuticals and cancer cases ' has pushed projected plan costs well above prior expectations and created pressure on next year's renewal.

Dr. Elworthy told the board the district has a self-funded plan and that plan-design changes since 2016, including separating active employees and retirees in 2022, shaped current liabilities. Matt Robertson of MMA said the district's current carrier and third-party administrator arrangement has limited exposure through a specific stop-loss of $150,000 per member, but a small number of very large claims this year have driven carrier payments above premiums collected.

The consultant outlined recent utilization trends: roughly 1,000 members were identified as eligible for care management and about 125 engaged; inpatient utilization rose sharply year over year while musculoskeletal claims declined (which staff and the board tied in part to MD Direct referrals and the district's new clinic access). Robertson said cancer-related and specialty drug claims have spiked in the last 12 months, producing several very large individual claimants (examples listed included hemophilia, liver disease, brain cancer and organ transplants).

Specialty drugs were singled out as a major cost driver. Robertson gave the example that one specialty medication produced several hundred thousand dollars in plan payments for a small number of members and promoted the voluntary RxValet program as a pathway to roughly halve the plan's acquisition cost for certain medications when members opt in. Staff said RxValet participation is currently voluntary and that communications (phone calls and emails) are ongoing to increase uptake; they noted the district could consider making RxValet mandatory for high-cost drugs as a plan-design lever, but that would require careful communication to avoid interruptions in medication access.

On finances, MMA presented high-level projections: carriers and actuaries placed the district's fully insured renewal last July in the neighborhood of a 29% increase; under self-funding, MMA estimated expected stop-loss and claims exposure in the ballpark of $23.6 million for the coming year, not counting an estimated $1.2 million in prescription rebates that are available to the district. Staff reported year-to-date premiums of about $1.6 million and stop-loss carrier payouts slightly above $2.0 million as of September, a mismatch that contributes to renewal pressure.

Board members pressed on whether declines in musculoskeletal claims are causally linked to clinic access and MD Direct referrals (staff said the pattern is promising but not definitively causal) and asked about alternatives to the current stop-loss structure. Consultants said the district could assume more risk by raising the specific deductible (for example to $250,000 or $300,000), which tends to lower premiums but increases the district's exposure for any given high-cost claimant and therefore shifts more risk to the district's balance sheet.

Dr. Elworthy told the board renewal action will be needed by Nov. 17 and outlined near-term options: apply prescription rebates to reduce the renewal; phase any employee cost increases over January and July to ease midyear impact; change copays or other plan design; or require RxValet for specific high-cost medications. The district also reported Achieve care navigation is fully staffed and beginning services (effective Nov. 3), which staff expect to reduce out-of-network utilization and overall costs over time.

The board did not take a final renewal vote at the meeting but directed staff and MMA to continue exploring options and to return with specifics in time for the November decision.