McAllen ISD: high‑cost claimants push up health‑plan spending; district exploring containment steps
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Summary
Risk management staff told trustees the district's self‑funded health plan saw high‑cost claimants rise from 21 in 2024 to 38 in 2025, increasing plan payouts from about $2.8M to $4.8M; district leaders said they are implementing benefit design changes and will investigate direct contracting and other cost‑containment options.
The McAllen Independent School District’s risk management team told trustees during a budget workshop that a surge in high‑cost claimants has materially increased health‑plan expenditures and prompted benefit‑model changes and new containment strategies.
Deputy Superintendent Lorena Garcia said the district implemented changes earlier this year that moved employees onto a single basic tier and added coinsurance; she said the district has seen a marked increase in high‑cost claimants, which has driven up expenditures. "We saw about a $2,000,000 increase in high cost claimants," Garcia said.
Karina Perez, the district’s risk management coordinator, told trustees the majority of the high‑cost payments are concentrated among eight employees and one dependent and that the claims are largely for terminal or chronic illnesses requiring hospital care, not for routine medication. "It's completely medical expenses," Perez said, describing hospital stays, treatments and surgeries as the main drivers.
Perez and trustees discussed several containment ideas: wellness incentives (the district has promoted a UnitedHealthcare wellness program that allows employees to earn up to $300 for completing preventive care), direct contracting with urgent‑care clinics or hospitals, and evaluating third‑party administration or alternative plan models. Perez said staff will continue to monitor monthly claims data and will bring additional information to the next budget workshop.
Trustees asked for a breakdown of what constitutes the high‑cost spending (e.g., inpatient care versus medications) and for more specifics about whether direct contracting or other strategies under consideration could materially reduce payouts. Perez said the district will provide more detailed reporting in subsequent briefings.
No policy changes were adopted during the workshop; staff said they began benefit changes in January and will return with more data before proposing further plan redesigns.