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Marblehead’s Finance Committee got a clearer — and potentially more optimistic — picture of the town’s health insurance costs Monday night, as outside consultants said a pending state vote could bring fiscal year 2027 rate increases in well below earlier projections, though significant budget pressure remains.
The committee met Monday night and heard a presentation from Danielle Chaplick and Sue Shillue of Hill Group, consultants to the town’s Public Employee Committee, which advises on health insurance decisions. Finance Director Aleesha Benjamin, who arranged the session, told the committee afterward, “This has been a really hard year for me. They really stepped up to help me through this whole period.”
Marblehead provides health insurance through the Massachusetts Group Insurance Commission. Benjamin said 703 active employees and 595 retirees were enrolled, for a total of 1,298 covered individuals.
Shillue told the committee that in fiscal year 2024, Marblehead’s claims-to-premium loss ratio reached 114%.
“So meaning $1.14 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 have had to be to break even,” she said. Through April of fiscal year 2025, that figure had risen to 119%.
Chaplick added that she had seen the ratio reach 140% in prior years. “Regardless it’s still well above the 85% target, if that makes sense,” she said.
That claims profile has effectively locked the town into the commission. When Marblehead put health insurance out to bid in 2023, no carriers responded.
“We did not get any responses back,” Chaplick said. “I know this time, the loss ratio was even higher than when we looked at it three years ago.”
The most significant near-term development is a commission vote scheduled for Thursday, March 5, on fiscal year 2027 rates. The commission initially projected aggregate increases of between 8% and 12%. After discussions about eliminating GLP-1 weight-loss medications and adjusting cost-sharing, that range dropped to between 4% and 8%.
“I’m guessing it will come in somewhere in the middle, maybe between six and 10%,” Shillue said. “But again, we’ll know exactly on Thursday.” The materials did not provide the total premium base needed to translate those percentage ranges into precise dollar figures for Marblehead.
Finance Committee Chair Alec Goolsby offered a rough estimate.
“If we’re able to reduce it by five down to 10, that would be about a $600,000 savings,” he said, adding that a reduction from 15% to 8% would represent closer to $800,000 against the earlier forecast. “But you know, there’s still a long way to go, if that makes sense.”
Benjamin said she would need plan-by-plan detail before calculating Marblehead’s precise impact.
“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,” she said.
Finance Committee Vice Chair Molly Teets asked whether the town had any levers to control costs beyond remaining in the commission. Lu said adjusting the employer-employee premium split was one possibility. Nunley-Benjamin confirmed that any such changes “would have to be negotiated with [the town unions], and we can’t just change those percentages.” Chaplick noted the town had tried plan-education sessions in 2017 and 2018.
“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,” she said. “Unfortunately, very few people moved.”
During public comment, resident Sarah Fox urged the committee to explore buyout incentives to encourage employees covered under a spouse’s plan to waive town coverage.
“I don’t think that our town can afford to kick this can down the road any further,” Fox said. Benjamin confirmed the town was already exploring that option but said it required negotiation.
In other business, the committee voted unanimously to hold all budget hearings in a single “Super Saturday” session on March 28. “I think Saturday solves two things,” Goolsby said. “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.”
Goolsby said he expected the Select Board’s Wednesday meeting to confirm a path to a balanced budget, allowing liaison meetings with departments to begin as early as Thursday. The commission’s Thursday vote will give Benjamin the plan-level data needed to revise the town’s insurance projections. How much relief that provides — and what remains to close the gap — will shape discussions at the warrant hearing and town meeting to follow.
