HUB consultant warns Laredo ISD health plan costs rising; district sees multimillion‑dollar shortfall before transfers
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Summary
HUB International reported rising health-plan costs—PEPM at $912.59 (up 15.3% YOY) driven by high‑cost claimants and expensive diabetes drugs—projecting a $3.6M shortfall for 2025 and $4.9M for 2026 before general‑fund infusions to the health fund.
Patrick Avila, employee‑benefits health consultant with HUB International, told the Laredo ISD Business & Support Services Committee that the district’s rolling 12‑month per‑employee‑per‑month cost stands at $912.59, an increase of 15.3% from the prior year. "One of the main drivers of that increase is your high‑cost claimants," Avila said, noting the plan tracks claimants who meet or exceed a $125,000 threshold and an individual stop‑loss threshold at $250,000.
Avila said the district had 25 claimants who had exceeded the $125,000 threshold through October and nine who reached the $250,000 stop‑loss level, compared with 17 and five, respectively, last year. He warned specialty drugs and pharmacy trends — particularly GLP‑1 medications used to treat diabetes, which he listed by example as Ozempic and Manjaro — are contributing substantially to pharmacy spend.
On fiscal‑year‑to‑date figures Avila reported total plan costs of roughly $8.4 million (about $950 per employee per month) and a calendar‑year total of a little more than $21 million (about $941 PEPM). "Based on contributions and projections, we are anticipating a shortfall," he said, estimating a $3.6 million shortfall in plan year 2025 and $4.9 million for 2026, "however these numbers will change significantly" once recent transfers from the general fund are factored into projections.
During questioning trustees pressed for both short‑term mitigation and long‑term strategies. Trustee Juan Ramirez asked what programs will be used to reduce utilization of GLP‑1 drugs; Avila described two engagement/wellness programs he said Blue Cross Blue Shield now offers (named in the presentation as Wonder and Omada Health) and recommended a district wellness program plus insurer engagement and incentives. He also recommended mail‑order (90‑day) prescriptions as a cost‑saving tactic.
Administration acknowledged the district has already made two infusions to the health fund this year and said HUB will reissue projections once those transfers are included. Avila said HUB will meet with staff early in 2026 to strategize for plan‑year 2027, examining contracts, member engagement programs and other interventions to reduce chronic‑illness costs.
The committee ended the item with administration agreeing to revisit projections and return with updated analyses and recommended program options.