GIC approves FY2027 premiums with weighted average increase of 7.5% amid debate over drug costs

The Group Insurance Commission voted to approve fiscal 2027 full‑cost premiums after staff presented actuarial calculations showing a 7.5% weighted‑average increase across Medicare and non‑Medicare products. The commission approved the rates in a roll‑call vote after questions about pharmacy spending and provider pricing.

Staff told commissioners the rates reflect utilization trends, expected membership, medical inflation and the effect of recent plan‑design changes — including standardized out‑of‑network reimbursement methodology and the commission’s prior vote to remove GLP‑1 coverage for weight‑loss indications. “These rates reflect the savings associated with benefit design changes you voted on in February,” Margaret said during the presentation.

Why it matters: Commissioners noted the distribution of increases varies widely across products and membership. Staff emphasized that while the 7.5% average is below the national projected range presented in December, many members will experience materially higher increases depending on plan choice and provider network. “We recognize that this is still a substantial increase to our members, and it will be felt,” staff said.

What was discussed: Commissioners pressed staff on the drivers of the increase. Commissioner Dean Robinson asked whether removing GLP‑1s from the FY27 projection should have produced a greater reduction given pharmacy spending spikes; staff responded that GLP‑1s are a large factor but other drug classes, large provider negotiated prices and coding intensity are also significant contributors. Commissioner Bobby Kaplan said even the lowest increases will erode recent pay gains for many state employees and stressed the real‑world impact on members.

Vote details: Commissioner Tamara Davis moved the motion to approve the FY27 premiums and Commissioner Darren Amler seconded. The roll call produced a majority in favor and the motion passed. Commissioners recorded as opposing the medical/Medicare premium motion were Vice Chair Bobby Kaplan, Commissioner Martin Curley, Commissioner Geron (Gerino Gard), Commissioner Kristen Pepin and Commissioner Dean Robinson; staff recorded the motion as carried.

Next steps: Staff said annual enrollment materials, member guides and portal updates will be finalized ahead of the April 1 enrollment start and encouraged members to shop among plan options. The commission asked staff to continue pursuing strategies to control pharmacy and provider costs and to report back on potential reforms.