Cohasset Faces $1.2M Hike in Health Insurance Costs

A sharp spike in health insurance costs has forced town officials to re-evaluate budget priorities as they work to close a $1.2 million gap. The news, delivered at the Feb. 4 Select Board meeting, comes as Cohasset prepares its FY26 budget.

“We just got news that the base increase is 15% and spans 99.9 to 19,” Town Manager Christopher Senior said. “So we’re hoping that we’re no worse than the midpoint.”

Senior noted that previous years had brought stable or even declining health insurance costs, making this increase especially difficult to absorb.

“We had years of zero to—we had a negative number at one point,” he said. “This is very much not common. That said, it’s a brutal increase.”

Cohasset’s employee health insurance is provided through the Massachusetts Interlocal Insurance Association (MIIA), which partners with Blue Cross Blue Shield. While the town is still analyzing the exact reasons for the spike, officials pointed to rising drug prices and overall medical inflation as major factors.

“It’s medical inflation everywhere,” Senior said. “A lot of it is apparently driven by drug costs, but not all of it.”

Budget Strain and Potential Adjustments

The insurance increase will significantly impact the town’s ability to fund other priorities, including education, public safety, and infrastructure projects.

“Everything is now revolving around that,” Senior said. “That sucked up a whole lot of money.”

To mitigate the financial strain, town officials are exploring options, including restructuring health plans, negotiating changes to employee contributions, and potentially leveraging free cash reserves.

Alternative Insurance Providers?

Select Board Chair Ellen Maher questioned whether switching insurance providers could be a solution.

“Are there any other options?” she asked.

Senior acknowledged that while other plans may have smaller increases, they could also come with higher base costs.

“We could look at some other options,” he said. “I’m not sure. I mean, some of the other plans are going down less, going up less in the area, but I’m not sure if their base is higher. They may [have] went through a brutal period a couple years ago. The GIC, the state’s plan, [has] some challenges. If we end up leaving them, it’d probably be a year from now, I think, because we really have to plan this in advance so we can look at stuff. And you don’t want to leave without planning.”

Potential Impact on Staffing

Select Board member Paul Grady voiced concerns that the increased insurance costs could have direct consequences on town staffing.

“That’s a teacher. It’s a couple teachers, that’s a couple [of] parents,” Grady said. “I don’t think this is the time—this is the time where we may take just a small pause.”

What’s Next?

Town officials expect to meet with their insurance provider in the coming weeks to explore ways to lower costs. A public update on the budget, including potential cost-saving measures, is expected later this month.

“This is a very hard to swallow cost increase,” Senior said. “And again, it’s not—it’s medical inflation everywhere.”