District #191 Eyes 5% Medical Plan Rate Hike Amid Soaring Drug and Mental Health Costs
Burnsville-Eagan-Savage School District #191 is grappling with the sustained rise in healthcare expenses, leading to a recommendation for a 5% increase in its self-funded medical plan rates for the upcoming 2026-27 fiscal year. The proposal, presented during a regular meeting on April 9, 2026, aims to cover escalating costs primarily attributed to prescription drugs and mental health services.
The district's executive director of administrative services, Stacey Sovine, outlined the pressing need for the adjustment, emphasizing that current trends in medical and prescription drug costs necessitate a proactive approach to funding. The recommendation was part of a comprehensive review of the district's 2025-2026 medical and dental plans.
With the continued rising costs of medical and prescription drugs not slowing, the need to adjust rates to cover expenses is what drives the recommendation for an increase to funding of 5%.
The Burnsville-Eagan-Savage School District #191 operates a self-funded medical plan, meaning it directly bears the risk for its employees' healthcare claims rather than paying fixed premiums to an insurance company. This structure requires the district to carefully manage reserves and adjust rates based on actual claims experience and projected costs.
Key Drivers of Rising Expenses
A detailed analysis presented by George Vander Weit, a representative from One Digital Insurance, highlighted the specific areas contributing to the cost escalation. Pharmacy expenses, in particular, were identified as a substantial component of the overall health plan spend. Additionally, mental health claims continue to exert significant pressure on the budget.
Pharmacy represents 25% of the health plan spend at $195 PMPM. Mental health claims continue represent over $1.1 million of spend, up 9%.
Beyond direct claims, the district also faces increasing costs for its stop-loss insurance, which provides protection against catastrophic individual claims that exceed a predetermined threshold. This vital safeguard against exceptionally high medical costs is also experiencing an upward trend.
Stop premiums will increase by 17% thanks to the stop loss premium cap.
The recommendation for a 5% increase directly addresses these compounding factors, aiming to ensure the long-term solvency and sustainability of the district's medical plan. The April 9 meeting served as a work session for review and discussion of these crucial funding recommendations, with no immediate official action taken.
District officials will continue to evaluate strategies to manage healthcare costs while maintaining comprehensive benefits for employees. The proposed rate adjustment underscores the broader challenges faced by organizations funding employee health benefits in an environment of accelerating medical and pharmaceutical expenses.
This story was created by artificial intelligence (a large language model) based on the proceedings captured in the video below.
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Burnsville Eagan Savage School District #191 Self-Funded Dental Plan Review and Funding Recommendations
▸Meeting Analysis
“Pharmacy represents 25% of the health plan spend at $195 PMPM. Mental health claims continue represent over $1.1 million of spend, up 9%.”
“With the continued rising costs of medical and prescription drugs not slowing, the need to adjust rates to cover expenses is what drives the recommendation for an increase to funding of 5%.”
“Stop premiums will increase by 17% thanks to the stop loss premium cap.”
“Funding recommendation is to increase rates 5% for 2026-27.”
▸Source Document
---
## title: Microsoft PowerPoint - Board Meeting.pptx
## author: George Vander Weit
date: D:20260402150136-05'00'
---
## Work session: Insurance Plan Review
April 9, 2026
Stacey Sovine, executive director of administrative services
George Vander Weit, One Digital Insurance Representative.
Believe, Belong, Build and Become.
## Burnsville Eagan Savage School District #191
2025-2026Medical and Dental Plan Review and 2026-2027funding recommendations
## 2025–2026Self Funding Medical (Through March2026)
Actual –3/2026Projected
## $13,207,456$23,727,495Medical Plan Claims
## (Net Stop Loss Violations)
$671,941$2,388,214Fixed Costs
## $13,879,397$25,814,721Total Plan Costs
$17,158,122$27,947,622Internal Funding
## $14,004,717$12,600,369Total Running Reserve Estimate
54.2%48.7%Reserveas % of annual costs
•Target Reserve: 55% of annual costs
## 2025–2026Self Funding Medical: Reserve Estimate
•Prior Reserve represents the
estimated reserve position at the end
of 6/30/25
•Projected Reserve At Expected is what
the reserve projection is given current
funding levels had claims been exactly
equal to expected medical claim
projections
•Actual Total Reserve is our reserve
position plan year to date
•Target Reserve is 55% of annual costs
## Reserve
$10,725,991
$14,640,538
## Feb-26,
$14,004,717
$13,088,150
## K
## $ 5.M
## $ 10.M
## $ 15.M
## $ 20.M
## $ 25.M
## $ 30.M
## Prior ReserveProjected Reserve At Expected
## Actual Total Reserve55% of Total Costs
History of Reserve balance
•Net ending position of self funded health plan per District Financial statements:
TargetChange in valueBalanceFiscal Ending
$8,405,544$9,066,555June 302020
$8,649,470($610,924)$8,455,631 June 302021
$9,309,463($1,105,171)$7,350,460June 302022
$10,907,833($1,914,409)$5,436,051June 302023
$11,457,917$2,200,196$7,636,247June 302024
$12,002,450$1,340,626$8,976,873June 302025
•Pharmacy represents 25% of the health plan spend at $195 PMPM
•Mental health claims continue represent over $1.1 million of spend, up 9%
•3 high cost claimants with each over $1 million in spend in the past 12 months
•High-cost claimants continue to represent over 18% of spend over the past 3 years.
The severity of the claims in number and dollar value over stop loss are improving but
this has created higher stop loss premiums over the past few years
•With the continued rising costs of medical and prescription drugs not slowing, the
need to adjust rates to cover expenses is what drives the recommendation for an
increase to funding of 5%
Health plan observations and funding recommendation for 2026-27
## 2026–2027Self Funding Medical Projection of Costs
## Projected
## $25,031,467Medical Plan Claims
## (Net Stop Loss Violations)
$1,927,805Fixed Costs
## (Less Pharmacy Rebates)
## $26,959,272Total Plan Costs
$27,428,758Internal Funding
## $14,940,538Total Running Reserve Estimate
55.4%Reserveas % of annual costs
•Target Reserve: 55% of annual costs
•BCBS administrative rate will remain at current rate.
•Stop premiums will increase by 17% thanks to the stop loss premium cap
•Plan has a $250k individual deductible with a 115% aggregate contract
•OneDigital consulting fee is a fixed annual fee of $75,000 and will not be
changing
## 2026–2027Self Funding Year Medical Projection
•Prior Reserve represents the projected
reserve position for claims incurred
through 6/30/26and paid through
12/31/26
•Projected Reserve At Expected is what
the reserve projection is given renewal
funding levels if claims are exactly equal
to expected medical claim projections
for plan year 7/1/26–6/30/27
•Minimum Reserve is 11% of annual
costs
•Target Reserve is 55% of annual costs
## 2025–2026Self Funding Dental (Through February2026)
Actual –2/2026Projected
## $602,993$904,489Dental Plan Claims
$40,617$60,925Fixed Costs
## $643,610$965,415Total Plan Costs
$587,559$881,339Internal Funding
## $446,113$418,088Total Running Reserve Estimate
46.2%43.3%Reserveas % of annual costs
•Target Reserve: 25% of annual costs
## 2026–2027Self Funding Dental Projection of Costs
## Projected
## $940,492Dental Plan Claims
$65,367Fixed Costs
## $1,005,859Total Plan Costs
$925,405Internal Funding
## $337,634Total Running Reserve Estimate
33.5%Reserveas % of annual costs
•Target Reserve: 25% of annual costs
•Delta administrative rate will increase by 5.9%
History of Reserve balance, claims and 2026-27funding
recommendation
•Net position of self funded dental plan per District Financial statements
–June 302020: $449,155
–June 302021: $460,555
–June 302022: $497,197
–June 302023: $525,883
–June 302024: $514,893
–June 302025: $481,786
–Claims are stabilizing
–Funding recommendation is to increaserates 5% for 2026-27
This story was created by artificial intelligence (a large language model) based on the proceedings captured in the video below.
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