The territorial government will spend roughly $9.5 million extra on Cigna coverage for active workers and non-Medicare retirees in fiscal 2027, following a 7 percent rate increase that took effect this week.
Across all insurance products, medical, dental, vision, life and Medicare Advantage, the government's total outlay will climb 5.8 percent from the current year. The timing is difficult: legislators have called the territory's finances "precarious," with a projected $59 million deficit for fiscal 2026 and individual income-tax collections down $31.7 million.
The rate rise stands out because actual medical claims fell during the prior year. Beverly Joseph, who chairs the Government Employees Service Commission Health Insurance Board of Trustees, reported to senators that monthly claims costs dropped 6.6 percent year-on-year, while plan membership fell 1.7 percent. Cigna initially sought a 17 percent increase before the Board's negotiations brought it down to 7 percent.
Christian Bergstrom, a benefits consultant, told lawmakers that the insurer's pricing reflects medical inflation. "probably one of the highest it's been in twenty years", alongside the insurer's profit needs, plan features and shifts in membership size. With claims running at 92 percent of premiums, he said, rate increases remain necessary to keep the plan stable.
Catastrophic cases are the real cost driver. Between October 2025 and August 2026, Cigna paid out roughly $93.4 million for high-cost claimants. At least 12 members racked up individual claims exceeding $2 million during the year, rising to 14 by September, many dealing with multiple long-term conditions at once.
The small 1.7 percent drop in membership has outsized impact. Bergstrom testified that it cuts monthly premiums by about $300,000, a $3.6 million annual loss. Joseph observed that falling enrollment compounds the problem: "You make two steps forward, and then it still gets pulled back down because of the cost that's paying out, and your membership is still low."
Senators aired frustration with the upward spiral. Novelle Francis Jr. noted that government health spending has jumped roughly $80 million over six to eight years, asking "When does it stop?" Kurt Vialet pointed out that health insurance now consumes about a quarter of a billion dollars yearly, crowding out funding for schools and other services.
Dental premiums will rise 6 percent, with claims at 104 percent of premiums. Medicare Advantage rates for retirees over 65 will hold steady, though their quarterly grocery and over-the-counter benefit will increase from $40 to $50. Vision coverage will see a small increase; basic life insurance rates will freeze for two years.
The Board secured an extra $500,000 from Cigna for wellness programs, bringing total wellness spending to $1.5 million.
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