The State Employee Benefits Committee agreed to increase rates for workers on state health insurance by 9.4%.
Chris Giovannello, who advises the state on benefits, said the committee had the option of a 16.8% increase at the beginning of July, or the 9.4% increase next year to address a $140.5 million deficit.
The committee is expected to vote for the same increase in the two years after that.
The deficit increase reflects a $1.8 million increase for covering weight loss medication, $3 million from the previous fiscal year, and $4.4 million from claims.
If increases aren’t made, the program’s deficit will increase to $305.5 million in the 2025 fiscal year, $534.3 million in the 2026 fiscal year, and $829.1 million in the 2027 fiscal year.
This 9.4% increase would increase employee costs for the healthcare plan by between $2.84 and 27.88 a month starting July 1, 2023, depending on which plan the worker chooses, and increase the state subsidy by $68.20 to $183.98 per month per employee.
If the committee had gone with a 16.8% increase, the cost for employees would have been between $5.08 and 49.82 per month, while the subsidy for the state would have been between $121.88 and $328.80 per employee per month.
Based on projections, the deficit would drop to $52.2 million in the 2025 fiscal year, down to zero in the 2026 fiscal year, and increase to $1.5 million in the 2026 fiscal year.
Cerron Cade, director of the Office of Management & Budget and co-chair of the committee, said that the committee has avoided raising rates for the past five years because the program once had a large enough surplus to deal with it.
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