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Katy ISD health plan running multi-year deficits; trustees press for options as pharmacy costs surge
Summary
Risk-management staff told the board that participation has fallen to about 61% and that pharmacy (specialty drugs) and large claims have driven a sharp increase in the health-fund deficit; the district reported administrative savings but trustees asked for TRS comparisons, clearer employee communications and options to support staff affordability.
Lance Nauman, Katy ISD's director of risk management, presented a semiannual update on the district's self-funded health plans and warned trustees that multi-year deficits have deepened since 2020. He said employee participation is roughly 61–62% (about 8,000 staff participants and roughly 13,000 total plan participants counting dependents) and that the district contributes $385 per employee per month (PEPM). "One of the biggest financial impacts you will see to a health plan are large losses," Nauman said, defining large losses as incidents greater than $75,000 and pointing to catastrophic conditions and specialty medications as…
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