With fewer state employees enrolled in the plan and increasing costs, economists agree the projected deficit in the trust fund that covers the costs of the state group health insurance program is twice as large as previously projected.
Members of the State Employees’ Health Insurance Estimating Conference on Wednesday tentatively agreed the state employee health insurance trust fund could have as high as a $170.3 million deficit by June 2024. That’s more than double the $61.8 million deficit economists had predicted in December 2021 when they last met.
The Department of Management Services (DMS) Chief of Financial and Risk Management, Stephen Russelll, said as of June 30 there were 169,791 employees enrolled in the program. That’s a reduction of 2,394 employees when compared to November 2021, Russell said. He said about 84% of active employees are enrolled in the state group insurance plan, just below the 85% average uptake.
There are fewer people working for the state, which skews enrollment in the program.
Meanwhile, Russell said 25,793 employees, mostly part-time employees who qualify for health benefits, declined coverage.
Overall, the state group benefit plans covered 349,717 people as of June.
The state employee health insurance trust fund is a combination of employees’ monthly premiums and state tax dollars. The state funds are used to cover the employer’s costs of health insurance benefits.
Economists gave preliminary approval to the enrollment and cost projections. But they are waiting for DMS to revise projected cost increases for pharmacy benefits in the program over the next several years. Economists directed DMS to rely on data CVS Caremark provided to the state in December that showed slightly lower increases than what CVS Caremark provided to DMS.
The revisions, Russell said, should lower the projected $170.3 million deficit for state Fiscal Year 2023-24. But