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Committee warned health insurance costs will rise sharply; FY2027 appropriation recommended up 14%

Joint Finance-Appropriations Committee (JFAC) · January 14, 2026
AI-Generated Content: All content on this page was generated by AI to highlight key points from the meeting. For complete details and context, we recommend watching the full video. so we can fix them.

Summary

Legislative Services Office analysts told JFAC that state medical cost projections require a substantial increase in the FY2027 health insurance appropriation (governor recommends a ~14% increase) and warned that employees could see an average premium rise of about 7.3% if the 20/80 cost split is retained.

Frances Lippett, a budget and policy analyst with the Legislative Services Office, presented the committee with a statewide review of health insurance costs and funding options for FY2027.

Lippett said the state's medical cost per enrollee has historically grown more slowly than projected increases over the next three years; she told the committee that "medical claims are anticipated to increase 7.5% annually" and that the FY2027 appropriation recommended by the governor targets the minimum required reserve level and would raise the per‑FTE appropriation by about…

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