Agenda 03-05-2026; 6-a - Approval of Employee Health and Dental Insurance Renewal and Continued Participation in the North Carolina Health Insurance Pool

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3 Medical Cost Drivers The primary cost drivers for medical claims are more varied. • The cost of cancer treatments and other cancer therapies have increased by 34%. New treatments are being discovered, approved, and put into use with unprecedented frequency. As the covered population continues to age, cancer rates are also expected to increase. • The cost of musculoskeletal outpatient surgeries has increased by 11%. • The cost of psychiatry, primary care, and specialist visits has increased by 12%. The utilization of these services by individuals covered by the Orange County plan is above the industry standard. Enrollment Increases In addition to the cost of claims, employee enrollment in the County plan has increased over time. Enrollments have increased 7% over the past five (5) years. The most significant increases have occurred in employee-only plans which are 100% County funded. The number of enrollments for employee-only plans has increased by 12% over the past five (5) years, or by approximately 80 enrollments. Considerations for Cost Containment Measures Staff have explored several strategies to manage rising costs while maintaining current benefits and is recommending that the Board consider two changes to the health insurance plan design. 1. Implement a RxSaveCard for GLP-1's used for weight loss • The RxSaveCard offers a projected savings of $500,000 annually based on current utilization. • The RxSaveCard provides a mechanism for consumers to have direct relationships with GLP-1 drug manufacturers through Lilly Direct and NovoCare. • This direct-to-consumer relationship lowers the cost to the health plan by eliminating the premium associated with the Pharmacy Benefit Manager that would otherwise serve as an intermediary between the manufacturer, pharmacy, and consumer. For example, the cost of a Wegovy prescription under the County's current plan is $950 per month. The direct- to-consumer price is $350, saving the health plan $600 per month. • Instead of insurance plan coverage for this drug, employees would purchase medications directly from the manufacturer. In practice, employees would receive an RxSaveCard, and the County would provide a subsidy of $375 on this card each month for the employee to purchase their medication. If the actual cost of the prescription is less than the $375 monthly subsidy, the excess funding is returned to the County. For example, the direct-to- consumer price of the Wegovy injectable medication is $350. Since the County subsidy ($375) is greater than the direct-to-consumer cost, the employee receives the drug for $0, and $25 is returned to the County at the end of each month. The savings and cost to the employee under this plan are detailed in the table below.