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GIC staff say preliminary FY27 rates could rise about 11% as GLP‑1 drugs and high‑cost claimants drive spike
Summary
WTW actuaries told the Group Insurance Commission the preliminary FY27 weighted average budget increase for GIC plans is 10.9% (range 8.9%–12.9%), driven principally by pharmacy spending — notably GLP‑1 medications — and a spike in high‑cost claimants.
Brian Stitzel, senior director and actuary at WTW, told the Group Insurance Commission that the firm’s early estimate for fiscal year 2027 budget rates — known at the GIC as premium equivalents — is a 10.9% weighted average increase, with an illustrative range of 8.9% to 12.9%. "We're currently estimating the FY27 increase for the GIC plans at an average of 10.9%," Stitzel said.
Stitzel said WTW sets budget rates by projecting total plan costs using recent claims experience (he noted heavy reliance on FY25 actuals) and carriers’ growth expectations into FY26 and FY27. He identified two primary, compounding drivers of the increase: rapid growth in pharmacy spending, in particular use of GLP‑1 drugs for weight loss, and an increase in the number and cost of so‑called high‑cost claimants — individuals with annual claims over $100,000.
WTW reported that prescription drug high‑cost claimant counts and spend have nearly doubled for the GIC plans and estimated GLP‑1 gross pharmacy spend rose from roughly $66 million in FY24 to a projected more than $300 million in FY26. Stitzel said high‑cost claimants represent about 1% of the covered population but can generate roughly 25% of claim expense in a plan year.
Commissioners asked clarifying questions about overlapping drivers — for example, how GLP‑1 prescribing intersects with chronic disease caseloads and high‑cost claimant buckets — and about the relative roles of price versus utilization. Stitzel said trend builds from both unit‑price inflation (how much providers charge) and utilization or service mix changes, and that WTW will continue to refine trend assumptions as FY26 experience emerges.
The presentation emphasized that most GIC plans are self‑funded, meaning the commonwealth and plan sponsors carry the risk for actual experience exceeding projections. Stitzel cautioned that the estimate does not reflect any plan‑design changes the Commission may adopt as savings levers.
Commissioners requested further detail, including historic unit‑price growth from health plans and a breakdown of which plans will likely see above‑ or below‑average changes. Staff and WTW said they will return with more granular data at future meetings.
