What's Happening?
The City of Waco is proposing a 7% increase in health insurance premiums for its employees, alongside a cut in coverage for GLP-1 medications used solely for weight loss. This proposal was presented to
the Waco Budget and Audit Committee as part of efforts to address a $4.23 million shortfall in the city's health plan funding. The proposed changes include a 12% increase in the city's premium payments, which would generate an additional $2.23 million. Without these adjustments, the city's health plan expenses are projected to exceed contributions by over $4 million. The city has engaged benefits consultant Lockton USA to negotiate the current prescription plan, achieving nearly $1.1 million in expected savings. The decision to cut GLP-1 coverage is driven by the high costs associated with these medications, which accounted for 17.5% of the city's medication spending in fiscal year 2025.
Why It's Important?
The proposed changes to Waco's employee health insurance plan highlight the financial challenges faced by municipalities in managing healthcare costs. By increasing premiums and cutting certain drug coverages, the city aims to maintain a sustainable health plan while managing public funds responsibly. This decision could set a precedent for other cities facing similar budget constraints. Employees may face higher out-of-pocket costs, but potential pay raises could offset these increases. The move to cut GLP-1 coverage for weight loss reflects a broader trend among employers to limit coverage for high-cost medications not deemed essential for chronic conditions.
What's Next?
The Waco City Council will continue to deliberate on the proposed budget changes, including the health insurance premium increase and drug coverage cuts. The council may consider alternative solutions, such as limiting GLP-1 coverage to employees only, as suggested by Council Member Andrea Barefield. The final decision will be part of the city's budget proposal for the new fiscal year starting October 1. Employees and their families will need to adjust to the new health plan terms, and the city will explore other programs to support employee health and wellness.
