Finance Committee: March 2, 2026

Transcript captured from MHTV’s Vimeo auto-captioning. No speaker labels; proper names and dollar figures occasionally misheard. Click any timecode to jump to that moment in the source video.

0:00 Hello, Tim? Uh, there we go. Sorry about that. No worries. Okay, Tim, so you’re the only one online, just so we have five in the room right now and, and Tim online. So we have a quorum. Um, I’d like to call our meeting to order at 7:03 PM Um, we’ll start off. Ramon, welcome to the FinCon. Thank you. I know we’ve spoken on the phone and I think you’ve spoken to some other members and we’ve exchanged some emails. But Ramon’s first meeting, thank you for joining and thank you for your, uh, service to Marblehead. Pleasure to meet you. Look forward to working with you. Likewise. Um, in terms of our agenda tonight, um, we don’t have a very long agenda. It’s, it’s basically we’re getting back together to reconvene, um,

0:46 our discussion last time about whether we can begin our liaison meetings again. Um, before we do that, we have a representative from, is it the GIC or the, the PEC? Um, this, this is hi group from our PEC From P from our PEC. Yes. Danielle Chalik, if I’m pronouncing that correctly. That’s correct. Um, there’s been a lot of questions for many years now about health insurance and, um, how Marblehead is impacted by the various changes to the, uh, the GIC and, and our, our PEC uh, agreements and whatnot. So, um, someone other than a town employee of Marblehead has been kind enough to come talk to us tonight, give us a quick presentation and, um, we’ll be able to ask some questions as well.

1:33 Um, so nice to meet you, Danielle, virtually, um, happy to turn the floor over to you when you’re ready and I can share your presentation on screen if, if you’d like me to.

1:46 Uh, sure. Hello everybody, nice to meet you. And also my colleague Sue Shalu is on as well. Sue, if you wanna say hi, I question. Hi everybody. Thanks for having us. Nice to meet you. Thank you both for joining. Really appreciate it. Um, let’s see. I think I can share. Can everybody see my, can everybody see my screen? I mi I might have just started sharing your presentation, but if you want to share that’s fine as well. Um, well, do you see a PowerPoint? Yeah, we see it now. Thank you. Yep. Okay, hold on. Let me just try to get to this.

2:26 Okay, great. Well thank you very much for having us. Um, I would like to say that for myself personally, I’ve had quite a bit of history with the town of Marblehead. I actually started my career at the Group Insurance commission and was there in 2012 when the town came into the GIC under, um, the town manager manager at the time, John McGinn, I believe his name was. And since then, the town has looked at the market three times and I have been involved as a consultant on each time that the town has evaluated its experience and its competitiveness within the marketplace.

3:14 So I do have quite a bit of history, um, and, you know, I’m happy to offer some insights in that capacity. And then, you know, obviously Sue has been brought on as well. She actually started this endeavor before I came on board with the town this time, and she has a, a wealth of experience as well. So we both appreciate the opportunity to have this discussion and we wanted to see how best in our experience and expertise it is in these situations, educating, um, stakeholders on what’s going on in the marketplace. Because that’s really the main question right now, you know, why costs are rising. And so in order to do that supplementally to

4:00 what we’re going to present today, we, I do have a couple of slides, but I think Alicia, um, hopefully has given you a report that we put together that is more contextual. And I’ll just give a, a brief overview of the nature of this report. So the town has been with the GIC for a very long time now, and really the bottom line as to why it, it’s continued to participate in the GIC and why it’s made sense for all of these years, a lot of that has had to do with the claims experience that the town has. And each time that we’ve looked at the risk pool of the spec

4:47 of this specific town, it has tended to run what we consider to be very high, um, un unusually high every time that we’ve looked at it. And, and so in that kind of situation where you have a lot of high cost claimants and you normally, there’s ebbs and flows to that which there could be for the town. You know, we, we evaluate the town’s experience every couple of years and the first time was a long time in between 2012 and I think 2016 because at that time the town was in for six years. So, you know, we’re taking a look at these, the experience in snapshots, just to preface what I’m about to say, but we’ve been able

5:34 to evaluate the claims experience I think every two years the last couple of times. And essentially because of how the town is running, we haven’t really been able to explore alternative options, although we’ve wanted to and have solicited other carriers and purchasers, but it has made sense that the town remains with the GIC to have the subsidization of the larger pool that the GIC covers. So we’ve done that analysis multiple times and I’ve seen that outside of the capacity where I am now also being done in the past and it has been consistent. So we wanted to put this report together to talk about, you know, that particular aspect

6:20 of the town’s experience in general. We wanted to give a sense of, you know, what are, generally speaking the different avenues that municipalities use to purchase insurance. So like Marvel head being participating in a joint purchasing group such as the GIC. There are also other smaller, more regionalized purchasing groups. There are groups like Maya that are statewide that are smaller than the GIC that measure, you know, participation a little bit differently. So for example, the town participates, the GIC through the statutes of chapter 32 VI believe the town went in under sections 21 through 23 in a lot of the other joint purchasing groups

7:07 and groups like Maya, they’re looking at your specific experience and how that relates to the general pool. And then of course there are options of being self-insured, which I believe at the time in 2012, if my memory serves me correct, the town was coming off of a self-insured model. So that means that the town is responsible for its risk. So it would be liable, you know, in times where claims are very high and when you have claims like the specific situation with the town of Mar Marblehead that are consistently high, it makes it very difficult to maintain a self-insured model. And then you have a fully insured arrangement, which is when the risk is, um, manifested

7:55 with the actual health insurance carrier. And the challenge with being in a fully insured model, although the carrier assumes that risk is that with healthcare costs as high as they are, those insured rates tend fully insured rates tend to be quite high. So in general, I say that, you know, given the dynamics that we know of with the town’s profile and what the limitations are, and then also the dynamics within the health insurance market, we have come to the conclusion as the town’s consultant that the best place for the town to remain at the time is in fact with the GIC. So part of the report, and really what we wanna talk about today is what’s going on in the marketplace and what is driving up costs.

8:45 So these slides really correspond with the presentation or the report that you have. They’re, they’re really the same information, we’ve just consolidated them into a few slides. So I wanna start by talking about what’s going on in the Massachusetts marketplace. And this slide outlines the market dynamics in Massachusetts that are really affecting affordability spending and access within the Commonwealth. And there are really a number of factors driving up costs, one of which is insurer consolidations. I’m sure that you know, and you’ve seen in the papers that we’ve seen the merging of insurance companies of recent, particularly with Harvard

9:32 and Tufts, which really reduces competition and has done so for municipalities. This means that consumers essentially have fewer options and it often limits the negotiations that can happen between insurers and providers. Now in general in the industry, what we’ve done and with a lot of other municipalities that we’re working with right now is that we’ve tried to procure other national companies like the Aetnas United and Cignas. We’ve tried to bring them into the fold so we can help to expand that competition. However, it’s been very challenging because their networks are just not the same as those of Blue Cross Harvard and what the GIC offers.

10:20 There have also been, particularly in the last year or two, changes to mass health reimbursements, which have resulted in providers charging more for services in the commercial sector. Again, driving up costs. We’ve also seen large hospital systems in Massachusetts that have gone through some very tough times financially, particularly since COVID and we most recently saw that with the Steward Health situation. There has also been, in general a depletion of healthcare profess professionals across hospitals in particular that has been exacerbated by burnout. In some cases, this has limited access to care for patients

11:07 and increased pressures on existing staff. Massachusetts has also seen a number of continued mergers and acquisitions with larger systems absorbing smaller hospitals and healthcare practices. A recent example of that is United Health acquiring Aous Health and its uh, hospital systems. This type of widespread mergers and acquisitions can lead to monopolistic dynamics, ultimately reducing competition and driving up prices for members. And finally, there is a disparity between rising healthcare premiums and stagnant wages in the Commonwealth that are being seen

11:53 as premiums increase faster than wages. More individuals struggle to afford necessary healthcare leading to financial strain, which has particularly affected family healthcare premiums in the Commonwealth. And here, which we go into great detail in the report or more detail than this in the report that you have, this slide identifies the key cost drivers influencing the healthcare sector. And this really relates in general beyond the commonwealth, across the nation as well. But understanding these DI drivers is essential as the basis for understanding why costs are rising. For example, there is a rise in healthcare demand due

12:40 to an increasing prevalence of conditions such as cancer, diabetes, muscular, skeletal, heart disease, and obesity. As the population ages as another example, there is a higher need for medical services and long-term care related expenses. Another very significant impact on costs has to do with due technologies and treatments, which most certainly have created and will continue to create more options for patients, but have also led to increased demand for services and thus added expenses. As mentioned previously, we are seeing sharp increases in hospital costs

13:28 and particularly when it comes to healthcare. We’re seeing higher costs for outpatient services, especially in the commonwealth. This shift toward outpatient services can initially drive up costs due to the need for more resources. There is an also an increased demand for emergency room services as well, which can lead to higher operational expenses. And finally, it’s becoming more expensive for, for providers to deliver care with new technologies, administrative considerations and operational demands. This is why we are seeing many of the smaller practices and hospitals being merged and acquired by larger systems here in Massachusetts.

14:17 All of these reasons contribute to why insurance premiums are rising at a rapid pace, especially what we’ve seen in FY 25 and FY 26 now, pharmacy costs have been a significant cost driver among these rising expenses.

14:38 And so here we’ve seen the increasing prevalence of chronic diseases, as I’ve talked about, and how these have directly contributed to higher spending in terms of pharmacy costs necessitating as these all necessitate more expensive treatments and therapeutic treatments, we are also seeing higher costs related to development, developmental costs associated with specialty drugs, which requires significant investment in research and development. Also leading to higher prices, especially in the long term with the rise of specialty medications comes added financial strain as healthcare providers and insurers navigate complex

15:25 reimbursement processes as well. Of course, what we have all seen and experienced this year is the challenges related to GLP one medications for weight loss, which have certainly undoubtedly provided therapeutic benefits to members, but have prevented unsustainable financial challenges impacting almost all employers and insurance plans. As I’m sure you’ve seen, most all insurers are eliminating GLP ones for weight loss off the formularies. And as of last Thursday, the GIC has also voted to do so. Although most employers and insurers are limiting access to these drugs for weight loss specifically,

16:12 there will surely be more and new advancements in drugs that are like this. So all of these are really the basis for the reasons of why costs are rising. And I wanna stop there and see if Sue wants to add anything to this narrative. Mm-hmm. I think all of that has resulted in the specific claims experience for Marblehead being in excess of the premiums paying that you’re into the GIC. So over the last, well, when we did her analysis last year, we looked at three fiscal years of specific claims for the town of Marblehead.

16:57 And it’s interesting because since 2020 with COVID costs have really been sort of a roller coaster that we initially saw significant decreases in costs and utilization. Um, and then we really expected that that was going to escalate pretty quickly that there would be a bounce back. But that didn’t happen for another year or two. And believe it or not, we are still seeing some of the ramifications of people not getting services or delaying services from COVID. But when we look at the claims experience specifically for Marblehead, which is affected by all the factors

17:43 that Daniel just spoke about, um, your costs are significantly increasing the premiums that are being paid into the GIC. So just as an example, in FY fiscal year 24, your claims to premium loss ratio was 114%. So meaning a dollar 14 was paid just for claims on every dollar of premium, whereas a break even loss ratio is about 87%. So that means that your claims experience was 27% higher than it would’ve had to be to break even.

18:29 And then through April of fiscal 25, that number was 119%. This is not unusual for municipalities who have joined the GIC because the reason you joined is it was a cost savings. So that and Oh, sorry, Bread just sort of continues on throughout the years. And I would just add too that I recall in 2016 or 17 when we looked at the town, and albeit at that time there were, I think five years had gone by since we had had the opportunity or the town had had the opportunity to look at its experience and at that time it was running 140%.

19:16 So it’s been running very high at times and continues to obviously run high now.

19:26 So Sue, this is the last slide. I don’t know if you just wanna speak a little bit about this, but we just wanted to show you sort of how all of this have manifested itself in the last five years and how these increases ha look like for medical and pharmacy trend. Sure. Um, what’s interesting, and you can read the chart, but what’s interesting is for FY 27, we are seeing the GXC average and the Maya average, and particularly the pharmacy trends coming down a bit on the pharmacy trend. It’s because everybody is eliminating the GLP one drugs for weight loss. So that’s having a drastic impact on impact

20:11 on rate renewals. The GIC originally was supposed to vote on their um, rate renewal back on February 12th, and then rates were gonna be voted on February 26th. They delayed the decision on the benefit design until February 26th. So they’re actually voting on rates this Thursday. The initial projection from the GIC if in fact no changes were made was going to be eight to 12% in the aggregate. When they started talking about the elimination of the GLP one drugs for weight loss as well as different deductible

20:57 and copay changes, they were then projecting that that rate range was going to come down to four to 8%. We will know on Thursday by plan what every rate renewal is, but I’m guessing it will be halfway between those two ranges. Maya, who last year, as you can see here, had an increase of between 10 and 20% this year. Their rate range is coming in just under 3% on the low end and slightly over 14% on the high end. So again, the, the reason that increases that we’re seeing this year are lower than last year is

21:43 because of the elimination of the GLP one drugs.

21:53 Great. Yeah, I mean this has been very helpful. It, it looks to be in line. I know Molly, you sat with, um, Alicia and some of the other team members on the, uh, the town finance and our trend seems to be within for fiscal year 26 year to date over last year in that 10 to 15% range, month to month. Um, if what I’m hearing correctly, if I’m hearing this correctly, it sounds that maybe the state of the towns health insurance number, which I think was initially at 15% will have to come back. I guess my question, um, collectively, I’m not sure for Danielle and Sue here or for Alicia or a combination is when I hear, you know, eight to 12% before GLP one coming out,

22:39 and maybe you know, down a little bit further into that six to 8% range, we’ll know Thursday it sounds like maybe more, but is that apples to apples with, you know, our health insurance active line, which last year was budgeted somewhere between 11 and $12 million town wide. Can we just follow that four to 6% or six to 8% or is there more on top Of it? I actually go into, once I know what the plans are, I look at where our populace, we have three main plans that we really fall into. So depending on what each plan is, that’s how we’ll know where we really Are. So it’s not necessarily just perfectly outlined by that estimated range or wherever it lands. It would be more so specific to Marblehead and who’s enrolled in which various plans within the GIC. Correct.

23:26 But either way we should expect that number to come down. Yes. It sounds like pretty that’s materially. Yep. So that’s actually really good news. It is good news. Well, from the original Estimates, yes. Right from the original estimates. Yeah. So I mean those original estimates, I think when you remove some of some of the items that were presented at state of the town related to capital and reserves and whatnot, I think the number was somewhere in the 8 million gap town wide deficit. Mm-hmm. I think it was probably closer to, you know, in that six and a half to seven range. It’ll certainly be great that that comes down, you know, the health insurance estimate between the estimate then and, you know, passing up the GLP one and the rates coming out hopefully lower

24:11 than, than where we were. Um, but I don’t know that it’s gonna solve, you know, all of it. Right. It’s gonna probably solve somewhere between 500,000 to a million of that would be my projection just based on the fact that 5% of last year’s budget is about 600,000 for that line. So if, if we’re able to reduce it by five down to 10, that would be about a $600,000 savings, um, in terms of, you know, version of forecast to actual budget item. But you know, there’s still a long way to go, if that makes sense. So, um, other questions guys? Question for Yeah, yeah. For for us Danielle and Sue. Yeah. Dave said several times, Marblehead is high risk bingo in terms of claimants and,

24:58 and what is that relative to, to other municipalities or in what’s driving bobbleheads claims? Yeah, So I would say unfortunately, um, there are many advantages to the town being in the GIC. One of the disadvantages is that we cannot get specific claims data, um, broken down for the town of Marblehead. So for example, we can’t see hospital utilization, prescription utilization, we certainly get a presentation from the GIC as a whole. And I think typically what we’re seeing across our entire book of business, which is all municipal, is that it tends

25:46 to be inpatient costs. Um, and prescription drugs tend to be the highest cost drivers. So even though we’re seeing the pharmacy trends come down because of the elimination of the GLP ones, pharmacy trends are still escalating. There are lots of specialty drugs that are on the market and the cost of those are very high in addition, um, it’s not necessarily an increase in utilization patterns, but more the unit price increase of those services.

26:24 But, you know, I think we can say that to kind of take it a step further and in, in general when we look at what we call benchmarking, so you know, other employers and other cost drivers and anecdotally from sort of what we can see with, you know, some of our other groups, it tends to be oncology related expenses, behavioral health, musculoskeletal, diabetes, and cardiovascular tend to be some combination. Not always, but usually at least three out of those five are in the top drivers.

27:04 So what’s really important here was it’s not the utilization, but the per unit that’s really driving the costs. Sweat. I, Yeah, I mean that I’m not, I’m not sure if they have the data behind it, the specific, specific to us Yes. Specific to us, but yes, yes. Overall that’s what I heard. Um, what Alec, can I just, when when you say absolutely, when, when you say that we’re like, are we in the top five 10% highest class? Like how, I mean how extremely high are our claims?

27:39 It’s hard to compare because we don’t see the data for all the individual groups, but I would say so our other, yeah, I would say for our other clients, cities and towns who are in the GIC, the vast majority of them also have high loss ratios. Again, getting back to the fact that when you went into the GIC, they had to accept you, they didn’t look at your claims experience. So the only reason a community would go in is because the premiums were lower than what their claims would’ve been, especially if they stayed out on their own. Yeah. So that trend just continues. So I would say you’re not drastically different than a lot of the other municipalities were in the GIC.

28:27 Okay. Thank you. And dating, dating back sue to the analysis here, team supported last year when I believe the contract was resigned. Um, I believe I’ve heard over the years through my role of FinCon, Alicia confirm Thatcher and you saying even if we wanted to leave the GSC when we’ve, I don’t know if you call it going out to bid, nobody would even pick us up. Correct. And you, I, I think I heard that on this presentation, but can we elaborate on that just a little? Yep. So we do hard if you’re, if your most recent Yeah, yeah. If your most recent loss ratio is 119% and a break even loss ratio is 87%, it means that if any

29:14 entity looked at your specific claims experience, you would see an enormous increase in rates needed to cover the cost of, um, to cover the cost of your claims. One other interesting point, because one thing that we do take a look at when we do the analysis are your large claims. So basically for the last three years we’ve looked at claims in excess of $200,000, and in fiscal 24 and 25 in total, for all subscribers that had claims over 200,000, there were only excess claims in the last two years of between 180,000

30:02 and $220,000. In fiscal 23 you had $836,000 in excess claims. So what that means is that it’s not necessarily it marblehead situation, it’s not necessarily that you are having a lot more people with excessive claims. If you probably have a lot more people who are hitting just under $200,000 in claims because it’s so much easier to get to that level now because of the cost of services. Gotcha. But we, we did, um, the town did initiate a bid in 2023.

30:50 So at that time, I don’t remember off the top of my head. We were looking, you know, backwards two years and that was right in the, in sort of the heart of the COVID time where claims were all out of whack because services were disparate, you know, during that year of COVID. At any rate, I think that the loss ratio was somewhere between 110 to 120%. We decided to put the bid out for whatever reason and, and we did not get any responses back. Okay. So, so that’s what I’ve heard. I just wanted to confirm that That’s right. It was Following along. Yep. So I know this, this time the loss ratio was even higher than when we looked at it three years ago.

31:35 So it’s, so when you went out to bid, it’s actually gotten worse since then. This last time around It’s been fluctuating. I mean not, not a huge variance, but I mean, I can stand back and say I’ve seen it be 140% and I’ve seen it be 115% regardless, it’s still well above the 85% target. If that makes sense. Yeah, that does make sense. Thank you. Molly, you have a question? So, you know, based on this discussion then, you know, joining the GIC and staying in the GIC is a lever that we can pull as a town to keep our costs low. Is there anything else that we can do this within our control to try to bring down these health insurance costs?

32:19 I mean, at some point you could look at coming up with a strategy to entice people to go to the lower cost plans by doing, um, changes to your contribution splits. It’s a little bit risky because for example, mass General Brigham, that is an HMO, that’s part of the offerings that used to be a less expensive plan offering. Now it’s one of the more expensive plans. So, um, the other thing is that it may not matter unless you’re looking to, um, leave the GIC, but if you incentivize people

33:05 to go into the lower cost plans, it means your loss ratio would continue to run poorly because you most likely would have the same claims, but you would be collecting less premium, which would make the loss ratio increase. Aside from leaving the GIC, that probably doesn’t matter. Um, but I would say there is the possibility of looking at contribution strategies And I I just wanna add, that would have to be negotiated with the PDC. We can’t just change those percentages. Correct. And I, I do wanna chime in ‘cause I know Sue would not have this history, but in 2017 and 18 under John’s administration,

33:52 we actually did do this, what Sue is suggesting, we ran 10 educational sessions, came out on site, had retiree sessions, and we did everything we could to educate people on the lower cost plans and, and the value of those. I think there was some

34:12 contribution strategy going on as well, but unfortunately very few people moved. I mean, we can certainly talk about doing, taking a look at that again, but we have tried that in the past. And Just to add on, so what we’re doing this year is we’re gonna actually have the different plans. We’ve given them the ability to come out like last year to talk to people, and we’re also giving them the ability to do virtual so people can meet with them virtually and find out some of the offerings that they may not have been aware of that are available to them.

34:42 If I could ask another question too, it sounds like when you walk through a lot of the drivers of these increased costs, um, they don’t seem to be abating, but do you have a a view on what we should think about for the next few years in terms of how and how we should be thinking about our insurance costs as a municipality?

35:05 I mean, I can start. I, I think, you know, I trying to take a look at the experience every two years to really stay on top of how, you know, how the plan is operating and where the risk stands is really the first and most important thing to look at, because that’s really going to drive what the options are for the town.

35:29 Yeah. And again, I think because the GIC is going to set the plan design and um, you know, as a matter of fact, they were going, as we discussed at the beginning, they were going to make plan design changes this year, which would’ve further reduced, um, the premiums. It would’ve increased the cost for your employees. So certainly if you’re in favor of that, you can start having conversations with the municipal commissioners just to express your thoughts on that. But again, because they set the plans, the rates, um, and the carriers really your, your

36:17 lever that you can pull is changing contribution str, uh, contributions on the town side.

36:27 Um, and if you are, you know, sitting in, in our chair or in the leashes, I guess more likely, you know, again, thinking long term about the cost increases that we should be budgeting and projecting and if, if the costs of our insurance are gonna go up maybe six, 8% or so this year, is that a, is that a number that you think is a, is we should, or what would you say going forward next year and the year after? I know you don’t have a, a crystal ball, but I’d just love to hear your thoughts on how you would project it if you were us Thought, oh, go ahead Danielle. Well, I was just gonna say, you know, first of all the GICs tended to be, you know, when we look at the market like a slide like this and we compare the GIC to what’s going on on the average market medical

37:13 and pharmacy trends and looking at, you know, groups like Maya or other purchasers and the direct carriers, the GIC has historically tended to be in be coming in a lot less in terms of their averages than if you, you know, were parti participating with Maya or with a carrier. So I think that’s important to understand the, the health insurance market because of all the factors we reviewed. As you can see even on this slide, it has been so volatile over the last two or three years going up and down that we really can’t predict what may happen in two years. Sorry, Sue. Yeah, Yeah, sorry. We’re, we’re not expecting to see these trends

38:00 decrease in the next two years. I think you sort of got a breather we’re, we’re hoping we’ll see on Thursday to get a breather for FY 27, but I think the bulk of that is due to the elimination of the GLP ones. So what it’s doing is it’s actually bringing your base down, but we’re not necessarily expecting the trends and the unit cost increases to change anytime soon or to go down anytime soon. And also, just keeping in mind that the carriers have to recontract with the providers on, on a rolling basis, I think it’s every three years. And because the providers are experiencing, you know, all

38:49 of those different factors that Danielle, Danielle went over, they’re seeing increased costs. So the negotiations between the carriers and the providers is getting more difficult. As an example, this past year, the end of calendar year 2025, blue Cross had to renegotiate their contract with the UMass Memorial Health System in central Mass. They had not come to an agreement. They actually got to the point where Blue Cross had to send out notifications to anybody who had used that system and say, you may have to find new doctors. At the end of the day they came to an agreement. But my guess is by coming to an agreement, the

39:39 contracts ended up somewhere in the middle of what Blue Cross was offering and what UMass was asking for. So we just don’t see a relief on the pressures based on contract renewals coming up. So for me, Molly, I would tend to probably go to 10 to 12% for our populace. Last year was more towards 12%. Here it’s 11.7 on average. So I’d probably stay within that range for right now for projecting until we see where they come to and what next year looks like. So hopefully on Thursday, like we said, it’s, it’s reasonable, but we’ll see depending on where we are concentrated, what it looks like.

40:20 That sounds right. Any other questions for our presenters? I have one question. Um, kind of reference that 85 to 87%, you know, break even claims to premium or loss ratio and we’re up around the one 14 and one 19 over the last couple years. That break even, is that compared to being in the GGIC versus being self-insured or versus being having another option as well? Or or is that just GIC to self-insured? Like No, that’s actually a general ballpark for loss ratio for health insurance premiums. If it is 87%, it means the other 13% goes to pay for, um, administrative cost risk reserves,

41:08 things of that nature. So it’s not specific to the GIC but sort of market wide. Okay, Mike? Sure. I was just wondering more of a big picture question about if, if all the municipalities in the GIC are struggling at the same, more or less right. That we are and it’s losing money at the premium basis. So how does a G is A GIC, is that subsidized by the state? It is, I believe so. So This The the missing premiums? Yeah, it, yes. Okay. So That Explains, when the GIC sets their rates, they set the rates as best as they can based on information that they have,

41:53 what your historical claims have been or what the groups historical claims have been applying trends to try and project out what the costs are gonna be in the upcoming year. If in fact claims come in higher than we’re projected and the funding isn’t enough to cover those costs, then yes, the state has to come up with an additional appropriation. The good news is, from the municipality’s point of view, partially good news, they’re not coming back to you for your share of that deficit. Now granted, if the, if the state has to pony up additional funds, you are all taxpayers.

42:41 So the taxpayers are paying for that doesn’t mean that there’s less money for the state to give back to municipalities for other programs. That’s the downside. But they’re not specifically coming back to you for your share of the deficit.

43:03 Yeah, and I mean, normally under a self-insured model, and that is what the GIC is self-insured, they would be able to have their own trust fund. So in years where they may have a surplus of money, they get to, to have that right, the reserves they call you guys are finance people. So I’m sure you know this and the GIC operates differently. So it’s, it’s when they have a surplus that goes into the state fund. Does that make sense? So then when they have a deficit, it becomes news because they don’t have like a structure that a normal self-insured group would have.

43:47 Any other questions for Sue? Danielle? Let me ask if an audience member has any question. Uh, sure. Quickly, yeah. Hi. Thanks Monica. Um, just a quick question. My name’s Lee Lander, I’m a reporter in town. I just wanna make sure I have the, um, the nu obviously the numbers correctly. So you’re saying that the increase this year you’re projecting is gonna be somewhere between four to six or six to eight. So is that accurate? What number, um, are you predicting what, what percentage Increase? Yeah, so, okay. Um, if you can hold off until Thursday, we’ll put the exact numbers right, But right now The, yeah, the GIC initially was projecting in the aggregate

44:33 without any changes whatsoever. The aggregate increase was going to be somewhere between eight and 12%. Then when they started talking about eliminating GLP ones and making changes to the deductibles and copays, they reduce that range to four to 8%. Okay. So I’m guessing it will come in somewhere in the middle, maybe between six and 10%. But again, we’ll know exactly on Thursday. Yes. And I think we are not predicting anything this, especially if this is a reporter talking, we are using the numbers that the GIC has had in its public meetings. So what we have on this slide is what they have said,

45:20 Except there isn’t an FY 27 on the slide. So what have They said? Oh, I’m sorry. I’m sorry. They haven’t Said anything for FY 27 or they have, Sorry, in the report that, that the committee has it stated in there, but we are using the numbers that the GIC has projected. Okay.

45:38 Okay. Thank you. You ask a few minutes during public comment Chair, you can do anything you want. Yeah. Thank you. Um, any other questions from the committee for Sue and Danielle?

45:57 Just wanna thank you very much. Uh, this was very clear, the presentation, um, the history with Marblehead was very helpful to understand the history about when we were not in the GIC when we joined times we thought about moving out of it, the challenges that we’re facing the markets. Um, very clear presentation. We really appreciate it. Um, a lot of, I will give Alicia credit, she’s, she’s portrayed all of these things to us over the years. But it is helpful to hear from folks that are independent from the town of Marblehead sometimes to back up the story, not just for this committee but for questions I’ve heard at select board meetings about this and many questions from the general public over the years as well. So hopefully our committee is better educated as the watchdog of town to be able to help, um, back up some

46:46 of this information and, and be able to help you kind of support town leadership in their, in their path to a balanced budget this year. Um, and it is good news that maybe things are coming in lower this year. We’ll wait a couple days before we talk about this too much further. Um, ‘cause it sounds like we don’t have to wait long but, uh, lower than maybe initially anticipated, um, just, you know, two, three months ago. So Thank you so much. That was so helpful. Yeah, thanks. Thanks for the presentation as well. Thank you so much ladies. Thank you all. Have a great night. Thank you. Thank you. Bye. So quick debrief on this. Um, we can see here 23, 24, 25, 26, 23 up.

47:32 5.4% is on average. We were in the GIC in 2324 up 5.16%. This is all the past 25 up 9.6% on six up on average, 12% right. Have we talked the revenue increases in marblehead enough over the last five years or somewhere between two and a half to 3% per year? So if anybody’s wondering if health insurance has had an impact, not only have we been talking about that, but we just had a presentation confirming it. We just had a presentation confirming my questions about do we have other options outside of the GIC, which again, Alicia has mentioned. No, um, I trust these people. They’re consultants of Marblehead, they’re looking out

48:18 for our best interests. Um, sounds like there’s some other things that can be looked into, would have to be negotiated in another contract next time around. Although it sounds like we’ve tried that path before in convincing taxpayers to enroll in the cheaper plans maybe on six. Obviously all things are on the table at this point as costs rise three times what our revenues are rising at a line item in our budget. Um, but my, that, those are my biggest takeaways. It was actually a very clear presentation. Yeah. Thank you for agree. That was Fabulous. A lot of what they presented at the beginning answered the questions I had. I just wanted to make sure I heard it correctly. Yeah. So thank you for setting that up. Yeah, yeah. Appreciate that. Agree. Um, so we off health insurance for a minute.

49:05 Let just ask one More question. Absolutely. Yeah, because I keep hearing retirees as well. So very naive question, why are they not on Medicare medicaid after 65, after they retire outwards, the system? The Majority of them are on Medicare. Sometimes if their spouse is not of the Medicare age, then they’re still on the active plan with their spouse. Okay.

49:35 Alright. So the rest of our agenda, um, is really to pick up where we left off last, where was all to liaison meetings. The town needs additional time with this budget gap that was presented at state of the town, um, to figure out a balanced budget. They did not have a clear picture as to where the gaps were going to be found.

50:07 There was a line item tonight that, that will clearly be impacting significantly. So that was a little bit even more reason to wait. Um, and we didn’t feel comfortable having liaison meetings with various departments around town and the schools without those department heads knowing what their budgets could even be to fit into this puzzle of a balanced budget with, I want to say 15 to 20 separate departments around ta. Um, I don’t have a ton of details that the fin comm should be deliberating on tonight, but what I can say is that I’ve been working closely with Alicia to stay updated on this as the chair and the select board has a very important meeting on Wednesday night where my expectation is that

50:55 a balanced budget, although maybe the details are not presented on Wednesday night, it will be confirmed that there is a path to get there and all of the department heads will know what their available budget is now that they’ve been through all of their follow-up meetings with Thatcher and Alicia and some final number crunching as we work towards this number we’ll receive on Thursday, which could impact it as well. Um, and from there, I believe, um, they’ll also discuss potential paths to ask taxpayers at town meeting how to fund that budget. So there’s not a lot of details for us to walk through before we see that detailed presentation, but what I can say is that they are very close to being able

51:42 to have those discussions. Um, so I I felt like we still had to have this meeting. I think it was a great presentation and, and I wanna make sure that we know that this is very late in the season for us to be having liaison meetings, right? Like typically in prior years, probably not tonight on the first Monday of March, but the second Monday of March, we’ve typically been having hearings where we’re voting on individual budgets. I mentioned the Super Saturday idea, which has been brought up to me in years past. We’ve kind of cut, stuck with this three Monday night in March, um, late February, March sometimes when little easier balanced budget seasons and years past. Um, I do think that’s still on the table.

52:30 I I think we should probably vote on that tonight. Um, of course if, if we can have a quorum, it’s fine if you’re not able to join that full day. Um, unfortunately I think we’re sort of up against a really challenging, um, timeline here. So I think Saturday solves two things. One, I think a lot of towns do it because you don’t have to have three meetings. You can kind of just get it done in one day, right? And it solves the other challenge of the fact that we are basically running out of time and it gives the department heads and the town a little bit more time for us for to, to get in front of us so that we can have our liaison meetings in March, um, finalize the balance budget and then all in one day from whatever time we decide can take lunch breaks, whatever it may be,

53:16 but to just get it all done, um, that would give us a full week after it would be March 28th would be my prop proposal for that. Um, before the warrant hearing in case there’s always some budgets that have what slight tweaked for various reasons, um, between the budget hearings and the warrant hearing and then again for town meeting. Um, so I think it’s important to have that kind of at least one week between that Saturday and the first Monday and April when we historically host the, the warrant hearing. So that’s really kind of the gist of, of the schedule. Um, Wednesday will be important. I know the select board’s ready to discuss some key items Wednesday. Um, my initial reaction to that is that we should be able to begin liaison meetings as early as Thursday.

54:03 I probably would hold off until then. Um, if you wanna wait till next week and let everybody digest, um, certainly if you hear your liaison meeting where you’re the chair is going to be significantly impacted by some of these decisions, then you might want to get that on the calendar as soon as possible. Um, if that makes sense. So I just, long-winded, but not a ton of detail to present tonight as it’s really not in our purview to present, be presenting the balanced budget before it’s been presented to us. So Mm-hmm. Any questions? You guys all all agree with this, um, super Saturday idea? Can I do a roll call because people are in line? Yeah. We’ll, we’ll take a vote.

54:48 Just, I just wanted to, you know, I know that there was good reaction to it the last time around. I do understand that it’s one day and maybe somebody can’t make it, but unfortunately I think it’s our only option at this point. You said the Alex, I’d rather do one solid day than, uh, the three, four hour nights. I understand. Yeah. I just, we didn’t really plan on it in the fall, so I feel bad asking a specific day now where we don’t really have a poll of who can attend and who can’t. But, um, I think we’ll have a quorum and I’ve, I’ve blocked it off. Okay. I’m available too, so, Hey Eric, how you doing? Yes, good. Just saw you pop up. Um, all right.

55:34 So I will take a vote to, you know, we probably don’t have to vote it, but we’ll, we’ll vote on, on having one super Saturday rather than the last 10 years I’ve been on this committee having three Mondays in March. So, uh, I’d like to make a motion to have all of our budget hearings this year for each individual budget that rolls up into the ballot budget at town meeting on Saturday, March 28th. Um, time details to uh, be determined, um, but that’s another thing to be communicating to the various department heads and um, com boards and commissions that you, you, I have a second. We Get access to the, uh, town coffee pot.

56:16 Alec, you have a second? Do you think that the department heads would be okay coming on a Saturday? Yep. To do that? Okay. Yep. I’ll be having bring breakfast for everyone. Yes. Okay. Eric gave a second. We gotta go around the range.

56:34 Yes. Alec will. Yes. Yes. Formal. Yes. Michael. Yes. Timothy? Yes. Kim, Eric. Yes. Any other items we’d like to discuss before we move to public comment?

56:56 Can I make a comment? Absolutely. I wanna thank the fin comm, especially Alec and Molly for the amount of time we’ve spent with me and supporting me through this. This has been a really hard year for me. They really stepped up to help me through this whole period. So I want to thank them. And I did request, I did bring forward, you know, how, which is really helpful, um, for me because it is hard when there’s so much information going out and I feel like this board really is supportive once it gets all the details and information, which really helps me. So thank you. Yeah, likewise, likewise. Alicia’s answering a tex and call within 30 minutes in the last probably three months. So, um, likewise. All right, let’s move on to public comment. I think we might need to do something online with that too.

57:42 I don’t know who was online. Yeah, there’s 10 attendees online, so if they raise their hand I’ll lemme know. Okay. So if you have a public comment from online, um, feel free to raise your hand. We’ll take ‘em in the audience first. Sarah. Um, so this is in regards to, you know, ideas to look at moving forward to see the health insurance. I’d first ask to do this in FY 20. Um, no one really wanted to. So I’m hoping we’re we’re progressing. Um, there’s many municipalities and for that matter, private companies as well that offer a buyout to incentivize their employees to go with their spouses, um, health insurance. And I think now at the rate that this is growing, we really need to look at buyouts. You know, you know, municipalities, they range from 4,000,

58:28 some go up higher, 10,000, but it still is a cost savings if the majority of our employees are taking it through us to incentivize. ‘cause if we’re paying out, I think worth 30% or 35% right now, coverage where their spouses maybe 40, they still have a net gain. If they switch to go to their spouses, you guys have a tremendous net gain and it stabilizes your budget line. So I would revisit that. I don’t think you have to wait for the PAC to be renewed to, to revisit that. You have to Negotiate with the pac. I understand that, but I don’t think you have to wait for the three year. My understanding is many of, at least when we were negotiating, it was something that was people were willing to reopen at any time. You can take a vote and people can reopen. I wouldn’t wait three years to look at it.

59:13 I’d start looking at it sooner than later because I don’t think that our town can afford to kick this can down the road any further. I would say we’re already looking at that, but like I said, it has to be negotiated.

59:26 Comment well taken. It’s been brought up in the past. I agree. We should be exploring any and all options. I think this presentation is helpful for us to think about that further and, and, and if that’s a path then, then we should look at that as well. I agree. Uh, any anybody else in the audience? We, yes. Okay. Um, so just to clarify, the super Saturday is when? March 28th, Right? But that’s where you, where the FinCo will vote the budgets? Yeah. So each individual budget that rolls up into a bathroom budget, which we’re required to present that town meeting. Um, we’ll get separately voted upon based upon how they’re split up. So, so there’s a select board departments grouping that has about a lot of them in the 10 to 12. Um, then the school cemetery park and rec. So

1:00:15 The liaison meetings will be completed at that point and before, before super Saturday? Absolutely. Yeah. And, and you know, some will probably require one, some have had liaison meetings, planning meetings, um, quick check-ins. Some will probably have one between now and then some may warrant two. Yeah. Um, I will say with that, when, when most departments are reducing their budgets a lot, liaison meetings are actually usually pretty quicker, easier, right? Because it’s more so what has had to come out and, and because we have to balance, um, my experience with when there’s sort of available funds and figuring out if we will approve new requests from groups, it’s, it’s, it’s longer discussion about whether

1:01:00 that makes sense and whatnot. That’s just my experience. It is important for us as the watchdogs. Certainly if there’s a department that’s getting hit with some significant cuts to help define those for taxpayers, especially if there’s gonna be some other means for asking how to cover some of those costs so they know what they’re voting on. Um, that being said, I can say that my experience is when when a department’s budget’s coming down, this discussion’s a little bit easier as as we’re not having to challenge it as much as, as when it’s going up, if that makes sense. Do you think that you’ll be able to identify, and I guess maybe this is more of an Alicia question, that, but not necessarily by department, but by area who’s getting hit. So let’s say the schools are gonna see a x percent reduction versus DPW versus, um,

1:01:46 My expectation is that on Wednesday there should be a summary of which maybe not to the level of detail that we’ll go into in these liaison meetings and budget hearings and warrant hearing and town meeting over the next month or so. But I think about it in terms of, um, if you look at the fin com handbook, there’s different categories, Jack, right, that we vote on at town meeting, general government, public safety, right? Human services, right? I think that level of detail may be discussed on Wednesday. I don’t wanna speak for the select board, but, um, the details will be revealed in all of our liaison meetings, budget hearings, warrant, hearing, town meeting. Um, I like to remind everybody if you wanna listen, these are all public meetings. We get a lot of why are we just hearing about

1:02:33 this now at town meeting? Um, we’ve been talking about most of this stuff for a number of years over and over and over. So we’ll di we’ll, we’ll digest or dissect, I should say the entire thing over the next month for sure. Last question, if it’s okay. Um, and I know that everything might change on Thursday, but for tonight, if we were predicting 15% increase on insurance and it’s more like six to eight, you, you, you had a number, Alec, where you said you think that’s a savings of approximately 600 K. Did I understand that? Yeah. So 15%, if we were gonna say eight, let’s take the higher range of that 15 minus eight is seven. Yep. 7% of last year’s line item.

1:03:18 That’s about $800,000. Okay. Which doesn’t mean that’s where we’re gonna land. That’s not final, but just to give it an idea and, and of course that’s awesome, right? If we can bring that back. But the other side of it is it doesn’t solve 7 million, right? So mm-hmm. But we’ll take, yeah, We’ll take it. And that’s all, that’s all because of like Wegovy and the GLP one sounds Like the GLP one vote, which happened last week, right? That that has reduced pressure and maybe that was part of the reason why we got up to the 12% average last year, 10 to 17 range. Mm-hmm. Um, so there’s some relief, but that’s not a budget cut, that’s just relief in a budget prediction.

1:04:03 Um, so there’s still challenge at 8%, right? That’s over double what we collect in property tax revenue increases each year. So for that line item, not the whole thing, But it’s much less than the increase last year. That’s right. If, if that’s where it lands. Right. So I, I’d I just have some patience and wait till Thursday. Yeah. Um, but I, hopefully she’s right. How will, how Will you let us know pe like the media and just the town, like when you hear on Thursday what the rate is, how will You, once we know what all the rates are, then we will, we’ll have to adjust the budget at that point and then talk to select board and then let you know. So it’s not like you could text me and say, oh you in and 8%. Right. Well we usually get a printout from them

1:04:50 so they may quote it and then we may get an actual printout. All the plans in like a week later. Yes. If you search GIC average rate, my expectation is on Friday morning there might be some articles about, okay, it’s put in the media in the bowl. The GIC website actually puts out a lot of good information in slides. Felicia, our time on our budget will be different than sort of the IC average. Right, exactly. So what she needs, She needs to get the details and Through our, because the impact on Marblehead will be different than like the average for, it’ll be higher. I see. Average for, we don’t know. It’s depends on our specific plans that and the mix of who, who’s in what those plans. And so Alicia will have to like crunch some numbers to actually find the exact Okay, cool. The number that we’ll be going into the Gotcha, gotcha.

1:05:37 Got seven forecasts. Okay. Thank you. If anything, it was really good to hear about the process that Alicia has to navigate when we’re doing the forecasts in the fall and then state of the town and then especially in more recent years when it’s been volatile. So, um, it confirms that there is a process which is always good. We knew that, but some people like to think that there isn’t, but there is. Um, so that detailed calc will get it perfect for Marblehead. Mm-hmm. Versus just a range. Right Jack? It’s just super curious that, that most, most of the people that are on, that are on the town insurance policy are actually working

1:06:22 because at 65 they’d go off with the exception of a few family members and that we’re so high. I mean it seems like there should be some if we can’t find It. Well Jack, that’s exactly why I asked that question. ‘cause I had the same question myself and that was really eyeopening what she said, which is it’s not the usage that’s gone up, it’s the cost per unit. Right. So it’s not like we have that many more people gonna the hospital or whatever like that. It’s because every time you go it’s gone up dramatically. So compared to Marketing science higher than other communities. Yeah, It does. Like that’s what she was saying. Yes, That’s what I heard too. Thank you. So maybe folks are going more at a higher cost here.

1:07:10 Right. And so for the retirees, they go on our Medicare supplement plans through the GIC, which last year, instead of it being on the 12%, those were at 7.6%. So this year I did actives at 15 and retirees around 7% based on last year. So it’ll be interesting to see what that Yeah, It, it is a good point that if you look at our other general government budget, which includes things like pension, health insurance, active, um, health insurance, retirees, PVC, Medicare reimbursement to retirees, um, these are all items that are carried on the townside of the budget as we know they impact school employees, town employees, um, and they grow at different rates. Even when these rates come out, there’s different rates for different line items.

1:07:57 So we’ve done a lot of digging into that recent weeks. Right, Alicia? Yes. So I think there’ll be some interesting information shared on Wednesday night about All that. Sorry, I know I said last one, but this is really the last one. Approximately how many town employees are on town insurance?

1:08:14 Town and school? I guess because you, You’re paying for both. I wanna say 1290, but I wanna look it up just to be sure. Okay. I think we determined right, that there’s somewhere between 180 and 200 town employees that are funded by the general fund townside. Yeah. But I mean she wanted to know town wide And, and then there’s the school as well, which I don’t know the, the employee breakout off the top of my head ‘cause I wasn’t looking at that in the last week or so. Um, so I would think a certain percentage. Do you have a percentage of employees that are enrolling versus not enrolling? Um, I have a total what is in enrolled. Oh, you know it, yeah. Okay. Rather than a percentage. Yeah, we can get that answer. Yeah,

1:09:01 You can just shoot it over to me anytime. Thank you. 1,290 are enrolled. Is that including retirees? Correct. So total active is 703. Total retirees are 595. Thank you.

1:09:25 We’ll get the exact numbers. I think that might be it, but we’ll confirm. Okay. Okay. You wanna know how many are school versus how many in town? Yeah, well, I just haven’t looked at the school numbers. General fund active, I have 382.

1:09:41 382. Okay. How many, how many, um, town do you have the town active? I do 7 0 3 minus 3 82, right? Yep. Okay. There’s probably folks enrolled in the health insurance that are, are funded by different departments that aren’t, Right. Yeah. So that yeah, that’s just the general fund piece of it. Yeah. So that’s not public safety. So public safety, uh, well, no. So it goes this way. It goes sewer 20 water 21 employees harbor 14 employees, like 68 employees. School food service. Yeah. So it goes Nine employees were taking it When I gave the 180 number as to how many wages,

1:10:28 how many physicians funded by the general fund. We, we backed out water, sewer. Yeah. Okay. I gave you the Include our retirees, right? Correct. So I’ll, I can send you a brief out we, But, but there’s a, there’s, there is a fee. There is a fee. Okay. For those following along here, there is a fee that the enterprise funds are paying the town for those costs. So those are reimbursed effectively? That’s correct. Can you repeat that? The enterprise pay their portion for the health insurance. Okay, cool. So that’s not the government fee. The government fee is in direct costs. That’s a different thing. Yeah. I just wanna make sure people Yes. Realize that we pay direct insurance.

1:11:13 So there’s, every question is loaded. So there’s a lot, there’s a long answer there. After round, I’ll do my best to get that summarized. Um, yes sir. As you know, the forced trading starts to happen to balance budgets. I, over the last year or two, I’ve noticed things move more into revolving funds. But what I haven’t been seeing happening is we have a bylaw in town that says any salary paid from a revolving fund that any additional cost, including health insurance is legally required to be paid from that revolving fund as well. Not all of that has moved over to those revolving funds. So I just think you should go back the last one to two years

1:11:58 to see what positions in various departments have moved to revolving funds and have, have their insurance migrated with them. Or is the recipient insured is still the Only, the only fund that’s, that’s on here that is different is the school food service and that’s the school food service employees. Otherwise, there’s no revolving, We have, the schools have moved people into other revolving fund, special education, revolving funds, things like that. Insurance has not gone with them. It, it needs to, Um, the way that Mike answered that, when you asked at the school budget hearing Yep. That seemed to make sense to me where it’s the way you think about how budgets work and you have different buckets that the, they would just change. Right. So he was not concerned about, or that

1:12:43 Bylaw, I don’t know. We can, we can just, You know, would Add in then he would need to take employees. He pays out of it out because there’s only so much he can dig into that. That’s one issue. The other issue is the law is clear. One issue doesn’t affect the other. So I’m just saying, and to be in compliance with the bylaw, you need to be making sure that any salaries that are paid out of any revolving fund also have their additional benefits carried with them. So I think that’s something that you can look into. But Mike was not, um, concerned. He, he essentially stated Molly, that he couldn’t afford to do that. And if he brought their, their benefits with them, if he had, I’m making up numbers here. If he had four employees to pay outta that and he had to bring their benefits too,

1:13:29 he would only pay three out of it. So what he was saying is, oh, I know I was there. So I I heard that. Yes. Thank you. So whether he can or can’t is, is not relevant in what the law states. Okay. The bylaw, The bylaw

1:13:43 Central, not a lawyer. So I’m just, I’m just doing it from an analysis standpoint. So essentially instead of paying for the employee’s wage costs, we put that back in the general fund anyway. Right. I’d be paying out of the general fund anyway regardless. So Yeah, Because that’s, we still need to be in compliance with the bylaw. Yeah, But I, I’m just trying to understand, I’m trying to understand what Mike’s point is. I think that’s Yes. Which is fine. You have to figure that out. But you, you can’t just start not being in compliance. No, I don’t disagree. I just, I don’t control the school budget, so he’d have to let me know. Yeah. All right. I think that may wrap it up, unless someone’s online I Have with, with their hand up.

1:14:25 No. All right. To make a motion meeting adjourned to eight 72nd. All in favor. Thanks. Have a good night guys. Thanks. Thank.