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Boston officials warn of $80 million FY27 health‑care shortfall; propose 22.6% premium rate increase
Summary
City finance officials told the Boston City Council Ways & Means Committee the city faces an $80 million jump in employer health‑care costs for FY27, driven by unusually high claims and greater GLP‑1 drug use; the administration proposed a 22.6% rate increase to replenish reserves and keep the self‑insured trust solvent.
Boston finance officials told the City Council’s Ways & Means Committee on Feb. 26 that the city is preparing for an unprecedented rise in employer health‑care costs that could add about $80 million to the FY27 operating budget.
Ashley Grafenberger, the city’s chief financial officer, said Boston is self‑insured and pays claims from a health‑insurance trust fund. After years of running down a surplus to stabilize premiums, the fund was hit in FY25 by ‘‘a series of exceptionally high cost claims’’ and increased utilization of GLP‑1 medications, which together largely exhausted the city’s catastrophic reserve and left the trust near negative by the end of FY26. "We have a fiduciary…
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