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Group Insurance Commission temporarily pends medical claims as supplemental funding shortfall grows
Summary
The Group Insurance Commission told carriers to delay medical claim payments after reporting a projected fiscal shortfall — about $240 million — while pharmacy claims continued to be paid; commissioners said staff expect the legislature's supplemental to resolve the gap soon.
The Group Insurance Commission (GIC) announced on May 12 that it placed a temporary hold on medical claim payments as staff work through a projected fiscal‑year shortfall and await supplemental funding from the state legislature.
Executive Director Matt told commissioners the GIC has run "unfavorable to budget" this year, citing rising medical and pharmacy claims. He said the commission has averaged a monthly deficit of about $20,000,000, a year‑to‑date deficit of roughly $188,000,000 and now projects a deficiency on the order of $240,000,000 before the end of the fiscal year. With supplemental funding uncertain in the immediate term, the GIC initiated a contingency plan that includes pausing payment of medical claims until funding is in place.
"We had to initiate a contingency plan," Matt said. "The step that we took was to pend or hold medical claims for payment until funding was in place." He emphasized the move was intended to preserve members' coverage and avoid disruptions to access to care and to providers.
The commission said pharmacy claims were not pended and have continued to be paid. Staff explained that pharmacy claims adjudicate and pay far more quickly through the PBM than medical claims, and the GIC prioritized ensuring members could access needed medications without interruption.
Chair Valerie Sullivan thanked staff for their communications with members, unions and retirees and said the commission appreciated the governor's supplemental budget filing and hoped the legislature would act promptly.
Commissioners raised questions during the meeting about (1) how the hiring freeze announced by the governor might affect GIC staffing and the CFO search; (2) whether future premium‑setting could build in larger cushions to avoid supplemental requests; and (3) how the GIC is communicating with providers. Matt said the FY26 budget submitted to the legislature accounts for more recent trends, and staff are using all communications channels to reassure members and providers.
At the meeting's start commissioners approved the April meeting minutes by motion and roll call; the motion passed unanimously, and the commission adjourned at the end of the session.
Next steps: staff said they would lift the hold on medical claims once the supplemental appropriation is enacted and continue to keep commissioners and members informed.
