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Germantown schools confront rising health and pharmacy costs; board presented $2.47M amendment and options to curb spending
Summary
District staff told the Germantown Board of Education that medical and pharmacy claims have jumped, with pharmacy now nearly half of total claims, and proposed a $2,469,274 budget amendment and a $30,726 stop-loss premium amendment while presenting options including the Tennessee state health plan, a new pharmacy benefits manager, and internal plan design changes.
At a February work session, Germantown School District staff told the school board that the district's self-funded health insurance plan has seen a sharp increase in costs and proposed budget changes to cover higher-than-expected claims.
"GMSD is allocated over $8,000,000 towards the health insurance budget," Speaker 6 told the board, outlining revenue sources (employee and employer premiums, pharmacy rebates and reserves) and the plan's major expenditures, including medical and pharmacy claims, stop-loss premiums, the district health clinic and administrative services.
Staff said claims that had averaged $3–4 million per year rose to about $7 million most recently, with pharmacy spending increasing substantially. Speaker 6 said pharmacy now represents nearly 50% of total claims and that, "we are experiencing an almost 12% decrease in per member per month pharmacy costs based upon this time last year" after recent formulary and biosimilar steps took effect.
To cover the current fiscal-year shortfall, staff said they will present budget amendment No. 7 at the district's business meeting:…
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