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GESC board secures insurance renewals after arguing a 17.5% medical increase; lawmakers press for wellness and review of self‑funding
Summary
The GESC Health Insurance Board recommended renewing Sigma and United contracts for FY2026 after intense questioning about rising claims; board negotiated a 17.5% medical renewal (after an initial higher ask) and will run a case study on self‑funding before any change.
The GESC Health Insurance Board on Sept. 17 presented its FY2026 recommendation to renew group medical and dental contracts with Sigma Health and Life and Medicare Advantage pharmacy arrangements with United Healthcare. Beverly Joseph, chair of the board, told senators the board negotiated an overall medical increase of 17.5% for the government plan after an initial underwriting estimate as high as 31%.
"The board was able to negotiate no increase to the 2026 premiums with no change in the plan benefits" for PO65 retirees, Beverly Joseph said of United’s offer — noting the pharmacy must be carved out for CMS funding purposes. For the under‑65 active plan, Joseph described the negotiated Sigma package that keeps current co‑pays and deductibles while adding prescription drug utilization-management reviews for select branded medications; Sigma projects a 2.5–3% savings from the program.
Senators pressed board members and carrier officials on underlying drivers: per‑employee medical claim costs rose about 18.4% year‑over‑year, with pharmacy showing especially sharp growth. Sigma and the board said a small share of catastrophic claimants accounts for a large share of spending, and they recommended a case study to analyze converting from fully insured coverage to a self‑funded (ASO) model. Consultants warned that self‑funding requires substantial reserves and a stabilizing of claims before it would save money; it could take several years to realize benefits.
The board also highlighted negotiated non‑premium benefits included in the Sigma package: nursing scholarships, nonprofit grants and a wellness fund, continuing on‑site customer service representatives, mobile health vans, and incentive programs. United will continue house‑call services and a quarterly food-credit benefit for Medicare retirees.
After the hearing, the Legislature proceeded with votes on FY2026 appropriation bills and later ratified the insurance renewals as presented. The board and carriers said they will report to the Legislature quarterly on monitoring and contractual compliance.
