Pennridge SD told to expect ~15% rise in health plan rates as GLP‑1 drug costs spike

Mister Pine of consultancy Conrad Siegel told Pennridge SD committee members that the district’s medical and prescription claims have risen sharply in recent years and that preliminary modeling points to roughly a 15% increase in plan rates for FY2627.

"We saw a 15 and a half percent claim increase in 23‑24, about a 9% increase last year in 24‑25, and right now through 25‑26 we're seeing about a 12% increase on that PEPM number," Pine said in the benefits presentation. He attributed much of the recent upward pressure to new prescription drugs for diabetes and anti‑obesity treatment (GLP‑1 medications), which he said have grown “threefold” in recent plan years and now involve more than 100 members on the drugs, up from roughly 10–15 members several years ago.

Pine provided specific prescription projections: total prescription claim utilization for the current plan year is about $5,880,000, an increase of roughly $600,000 versus the prior year. He said anti‑obesity drug claims were expected to rise to about $1,300,000 this year from $780,000 last year — an increase that accounts for most of the prescription cost growth.

The consultant described the 15% figure as preliminary and subject to revision when additional claims data arrive; he said the projection would likely be finalized in March or April. Pine explained the district calculates the FY2627 projection using three years of claims experience trended forward and that the district’s self‑funded status makes growth in claims directly affect the trust and the district’s cost exposure.

Board members asked about the effect on employees. Pine said contract language varies by group: an example showed Act 93 employees’ contribution moving from 14.5% to 15% was modeled to translate into roughly an 18–20% increase in out‑of‑pocket premium share; some transportation employees could see contribution changes of 25–30% depending on current formulas.

Committee members also discussed the district’s fund balance. Staff reported the health fund balance is approximately $9,000,000 after the district used about $3,000,000 last year from a $12,000,000 reserve; Pine said projected claims near $18,000,000 would make $9,000,000 roughly a six‑month reserve target often recommended for self‑funded plans.

The presentation outlined mitigation steps the district is exploring: issuing a medical request for proposal/market check before the Independence Blue Cross contract ends on 06/30/2026, evaluating administrative fees and network arrangements with prospective vendors, and assessing PBM‑level programs. Pine cautioned that pharmacy benefit manager and manufacturer rules limit setting overly strict access prerequisites for GLP‑1 drugs (rebates can be withheld), but staff are vetting lighter engagement requirements such as monthly health‑coach check‑ins to pair with treatment.

The presentation closed with operational items including a planned medical RFP to be executed in the next one to two months and further cost‑tracking updates to follow.