Consultants are telling state lawmakers that funding for public school districts’ health insurance programs is adequate for now.

Funding for the state’s health insurance program for public school districts is “adequate,” a pair of advisers told members of the Arkansas House and Senate Education Committee on Tuesday.

Patrick Klein and Matthew Kersing from Segal Group Consultants briefed lawmakers on changes to the state’s health insurance minimum contribution rate.

The state’s minimum monthly contribution rate for districts is $150, but is set to increase to $300 in January. He said the state would need to increase minimum contributions from school districts to keep up with rising health care costs.

“Based on our forecast, we think the money is sufficient in the short term, but taking into account the medical inflation associated with the program in the next five years, there may be important changes in the long term,” said Kersting.

During the budget session earlier this year, lawmakers allowed the Senate and House education committees to set minimum health insurance contribution rates for school districts.

The projections show that at a minimum contribution of $300, the health insurance program for participating school districts would begin to lose money in fiscal year 2025.

Under those projections, the state’s total resources for the health insurance program in fiscal year 2027 will drop below $89 million in reserves.

It is estimated that the price increase will come from the increasing medical and physician claims and the management, the consultants. Kersting recommended that state equity increase the minimum contribution from school districts and funding from the Department of Education to the medical consumer price index.

It’s balancing contributions to the state from school districts, employees and the state Department of Education with rising health care costs, said Republican state Sen. Missy Irvin of Mountain View, chair of the Senate Education Committee.

The consultants set projections to raise reserve levels through fiscal year 2025 and beyond to reduce losses in the state’s school health insurance program.

Lawmakers could raise the minimum contribution to $328 or gradually increase it from $300 in 2023 to $347 in fiscal year 2027, based on proposals from the advisers.

State Rep. Bruce Cozart, R, said, “What they’re telling us is, we’re good for two more years, but this next session we’re probably going to have to come up with new legislation to deal with it.” -Hot Springs, Home Education Committee Chair.