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Gallagher analysis: large medical claims drive higher costs but city fund balance rises
Summary
Gallagher presented the city’s employee benefits renewal for the 2025–26 plan year, reporting a roughly 30% year-over-year increase in net medical claims driven by several large claims and specialty drugs; staff recommended modest dependent-rate reductions and lower out-of-pocket maximums while keeping employer contribution levels steady.
Jeff Summers, the Gallagher benefits presenter, told the Nacogdoches City Council at its Aug. 19 budget workshop that the city’s net medical claims rose sharply this year. "The net increase was a little over 30% year over year," Summers said, and he attributed most of the rise to several large claims, including one exceeding $500,000, and higher specialty-drug spending.
Summers said pharmacy claims were up about 11.3% and that administrative and reinsurance costs fell, leaving the net overall…
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