As a State of Minnesota employee, your healthcare provided through the SEGIP plan is bargained similarly to how the collective bargaining agreement between MGEC and the State is bargained. But because healthcare is common to all state employees irrespective of which union they belong to, healthcare is bargained with all of the unions as part of a coalition.
While Minnesota employees have generally been well-positioned as other employers have increased their costs of healthcare, the economic experience of 2025 is dramatically different. Costs are rising much faster than anticipated; the self-insurance fund balance (that last year we sought to spend down) was projected to be at the recommended level in 2028 suddenly will fall to that level this year because medical expenses are so much more than predicted. The cost of the weight-loss and diabetes management class of drugs known as GLP-1s, for example, went from almost nothing a couple of years ago to almost $50 million this year. This is an example of an expense that no plan, public or private, has anticipated, and there is no area of healthcare from pharmaceuticals to hospital stays that has seen dramatic cost increases. The stocks of Minnesota-based healthcare based companies such as United Healthcare have declined because of the same unanticipated fundamentals.
Negotiations for the next healthcare biennium are ongoing. Both sides met offering initial proposals on April 30th; the sides met again on May 8th to respond to those proposals. The next session, prior to this writing, is May 13th.
Fundamentally, the unions’ asks were about expanding benefits and refining access especially for members in Greater Minnesota. The state’s asks involved shifting almost all of the new costs to employees, creating significant new costs for members. Like any negotiation, where the process ends bears little resemblance to where it began. We are committed to fighting for the best possible outcome for our members in a very challenging year.