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Actuary Warns School Health Fund Could Run a Deficit by Late 2020s; Recommends Higher Base Contribution and CPI Indexing
Summary
A Segal Group actuary told the Senate Education Committee that Arkansas' school employee health insurance fund, while currently well-resourced, faces projected deficits by 2028–2029 without funding changes; he recommended raising the base contribution and indexing increases to medical CPI. Key questions from legislators focused on pharmacy rebates and utilization trends.
Patrick Klein, an actuary with the Segal Group, told the Senate Education Committee that Arkansas' public-school health insurance fund currently holds about $250 million in assets but is projected to move into a structural deficit in the late 2020s unless funding or cost trends change. "The trajectory of the fund in 2025 and beyond is in a negative position," Klein said, citing Milliman's cost projections and a medical cost trend he described as roughly 6 percent versus a long-term target medical CPI of 4 percent.
Klein described three primary funding levers for the plan: employee contributions, district…
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