GIC CFO: program $142 million over budget through January; staff working with state on funding

CFO Jim Rust reported to the Group Insurance Commission that, through January 2025, the program is approximately $142,000,000 over budget — roughly 8.9% above expectations — with about $100 million of the variance tied to pharmacy spending, including higher-than-expected use of GLP‑1 drugs.

Rust said the program has seen a roughly $20 million-per-month run rate above budgeted spending and that staff are forecasting the deficit will persist through the remainder of the fiscal year. He told commissioners that, based on current cash flow, the program should be able to cover obligations through mid‑May but that staff are working with the state Administration & Finance (A&F) team on a supplemental budget solution.

“Through January 2025, we are $142,000,000 over budget,” Rust said, and he added that pharmacy spending accounts for a large portion of the variance. He also said the pricing team's corrections to actuarial assumptions should avoid starting next fiscal year in a comparable deficit position.

Commissioners pressed for monthly updates and for staff to outline how supplemental funding would be secured; Rust said the A&F team is aware of the situation and that discussions are ongoing about the appropriate vehicle for any supplemental appropriation. The commission asked staff to keep the board informed of cash-flow forecasts and steps to bridge the gap so claims can continue to be paid on schedule.

The commission requested measurable tactics and interagency coordination aimed at reducing the rate increases that will affect members during next year’s enrollment.