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Year-end benefits report: 2025 claims rise; specialty drugs drive costs, consultant says
Summary
Lynn Fontaine told the committee that 2025 group health claims rose roughly 7% year‑over‑year, with prescription drugs—especially high‑cost specialty medications—accounting for the largest share of plan costs and pushing medical trend above past averages.
Lynn Fontaine presented the committee with the district's 2025 year‑end group health claims, saying total claims rose about 7% from the prior year and that prescription drugs are now the largest single driver of costs. "Prescription drugs, I'll note, is 41.7% of our of our total claims," Fontaine said, highlighting that a small share of specialty medications accounts for a disproportionate share of spending.
Fontaine told board members the plan saw rebates and discounts that helped offset some increases: "We got back almost $4,000,005.79 in pharmacy rebates," he said, and described net paid claims and fixed costs that together yielded an overall plan increase Fontaine described as "about a 4.7%" trend when certain reimbursements are factored in.
Board members asked detailed questions about utilization and medications. One member asked whether GLP‑1 class drugs now commonly used for diabetes are being approved for prediabetes; Fontaine replied, "No," explaining the plan's preauthorization criteria limit those drugs to medically authorized diabetic indications. Members also pressed about where high‑cost claimants receive care; Fontaine said utilization patterns reflect where those patients received services and noted hospitals remain in network while some facilities renegotiate contracts with major carriers.
The presentation included a review of per‑employee costs, generic utilization (about 83.8%), and a list of the top medications driving expense—Fontaine said a small percentage of prescriptions (roughly 6.7% of scripts) are driving about two‑thirds of the pharmacy spend. He warned that high‑cost specialty medications can cost tens of thousands of dollars per month and said plan design and rebate management are the principal levers the district can use to control pharmacy inflation.
The committee did not take action on the presentation; Fontaine's report was received and members asked staff to keep providing the detailed monthly materials cited in the packet.
