Increased insurance cost will wipe out 1% raise granted by Legislature, budget director says
By:Morgan Chilson
Kansas Reflector
TOPEKA — Kansas state employees choosing Blue Cross Blue Shield of Kansas health insurance next year will see rates rise by 15% while employees choosing Aetna won’t see an increase as the state encourages a shift to the less costly insurance.
Members of the Kansas State Employees Health Care Commission expressed dismay that state employees received just a 1% raise this year and spent more than three hours at their June meeting looking at ways to lessen the impact of rising health insurance costs.
To meet statutory requirements and make sure there are reserve funds in the state insurance plan, rates had to be raised, commissioners said, as they considered options to change plan deductibles and determine rates for the state and employees.
At previous meetings, the commission considered dropping Blue Cross as an option to save money because the proposal made by Aetna was less expensive. But employees from across the state objected, raising concerns including whether the Aetna network is strong in rural areas among other issues.
About 34,500 Kansas employees chose Blue Cross as their insurance carrier in 2026, while 4,500 chose Aetna.
In the end, the commission tried to incentivize employees to move to the Aetna plan by approving an increase of 15% to the employee contribution for Blue Cross, no raise for Aetna insurance and a 16% increase in what the state pays. Employee contributions will go up Jan. 1, 2027.
Changes were also made to increase plan deductibles.
Adam Proffitt, commission chairman and secretary of administration, listed the increases state employees have shouldered for health insurance in 2016 through 2019 — 6.4%, 9%, 7.7% and 3.3% for employee only plans.
“There were no pay raises in any of those years,” he said.
For employee, spouse and child plans, increases were 36.7%, 30.4%, 31.8% and 16.7% during those years, Proffitt said.
“There’s only a 1% increase for state employee’s pay this year,” he said. “In my estimation, I think the state owes either a pay increase or holding the line better on benefits.”
Proffitt said an employee making $30,000 a year would receive a $300 salary increase that will be “wiped out” with the increase in benefits costs.
Even with the increases in costs, the state insurance funds are projected to have $7 million at the end of 2027 and nearly $40 million at the end of 2028, according to data shared at the meeting. That is about $55 million below statute requirements, which require a percentage of estimate claims to be held in reserves, in 2027 and $27 million below in 2028.
Rep. Bill Sutton, a Gardner Republican who serves on the committee, said the health care fund was projected to have a balance of nearly $40 million this year, but early in the year, that was wiped out.
In earlier discussions, staff attributed the drop to higher medical trends and higher pharmacy trends, with specialty drugs driving much of the reason for the higher expenses.
“We’re looking at ending in a terrible position this year and what we’ve done with these changes is simply, hopefully, ending in no worse terrible position a year from now,” he said. “I’m not sure what we’ll do if we have a similar course of events that occur early in 2027 that would simply wipe out the projected balance we have.”
Sutton said he’s hopeful the commission can build up the fund so “large, dramatic changes” aren’t needed to stay solvent.