The State Health Plan (Plan) Board of Trustees met today to make pivotal decisions on the future direction of the Plan with actions to address its $507 million deficit. The board approved changes to benefits for the 2026 benefit year, which will begin Jan. 1, 2026. Member premiums will not be voted on until the August board meeting.
The board has been working to keep the Plan viable for the more than 750,000 teachers, state employees, retirees, and their dependents. To that end, the Plan is pivoting toward a more sustainable approach introducing a new Preferred Provider program focused on value, quality, and access. This will replace the current Clear Pricing Project (CPP) effective Dec. 31, 2025. This change will place the Plan on a more sustainable financial path while continuing to provide member with access to high quality, affordable health care.
More cost savings are hoped to be achieved under newly approved bundled payment program options for members who seek care at certain facilities for certain procedures by high quality providers. The board voted to allow the flexibility to implement these bundles as they become available.
The board also approved benefit changes for Active, Non-Medicare and Medicare members, which included changes to deductibles and copays. See graphic below.
“I know the changes to benefits the board made today are hard, but I’m confident that these changes, coupled with new provider opportunities we’re working on, will place the Plan on a stronger financial path moving forward,” said State Treasurer Brad Briner, who chairs the board. “We’re evolving from what we’ve learned and focusing on what works: trusted provider relationships, financial predictability and meaningful support for our members’ health.”
It is good news for the Plan’s Medicare Advantage Plans administered by Humana. Members will only have one small increase of $100 in the pharmacy out-of-pocket maximum for 2026. To keep benefits stable, the Plan will split the medical and prescription drug plan. It will continue to be administered by Humana and will save the Plan $70 million in 2026. An important note for Medicare Advantage Plan members: This means they will now receive some duplicate communications and two identification cards.
Because of the steps taken by the board today, it is expected premium increases will be less than previously anticipated, with some premiums in the standard plan, lowest salary -banded tier only expected to go up $5 per month. The board will vote on premium costs at its August meeting. The expectation is a new state budget will be approved by then, with a clearer picture of financials heading into next year.
Plan members will receive more information regarding the changes approved today prior to the 2026 Open Enrollment period which will take place Oct. 13-31, 2025.
The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to more than 750,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.