LEYDEN — As questions remain regarding the future of the Hampshire County Group Insurance Trust, town officials in Leyden are considering switching insurance providers.
On July 30, members of the trust voted to increase rates by 20%, effective Oct. 1, after being informed that the trust was at risk of going bankrupt due to increased pharmaceutical and medical claims and the growing popularity of weight-loss drugs. Executive Director Joseph Shea told members that the trust’s reserves have dropped from $20 million in January 2024 to less than $5 million, and given the trust paid out $8.5 million in medical claims in May and then $2.9 million in pharmaceutical claims in July alone, action needed to be taken for it to be able to pay expenses and rebuild reserves.
The decision left the trust’s members scrambling to figure out how to pay for the increased health insurance costs after their own budgets had already been set. In Leyden, Town Coordinator Michele Giarusso said the town has so few employees that it can handle the increased costs for this year. Still, the town is meeting with other insurance companies to explore if there are better rates and more stable options available.
For fiscal year 2026, Leyden residents voted to budget $120,000 for health insurance costs. An additional 20% increase would require the town to pay another $24,000.
“I was not impressed at all with the HCGIT presentation. We heard a lot of excuses,” Giarusso said, referencing a meeting the trust had on its August financials last week.
State Sen. Jo Comerford, D-Northampton, told the Leyden Selectboard on Monday that there is little the Legislature can do, as the state budget has already been set and the state had no oversight over municipal health insurance policies. She said she and her colleagues in the Legislature will continue to work with the towns to see how they can support them.
“We’ve come to understand over time that it’s a combination of a number of factors that has eroded HCGIT’s resources, and the situation is dire,” Comerford said. “I think we’re going to see hikes again in the future, so now we’re in a situation where there isn’t a large net underneath HCGIT. … My worry is insolvency. My worry is that we have a bad month and all of a sudden HCGIT can’t pay its bills.”
She said Gov. Maura Healey’s office and the Massachusetts Division of Insurance have been informed of the situation and will be working with HCGIT to see how the state might support the trust in rebuilding its reserves.
“We are still pursuing a safety net so there isn’t a moment where all of a sudden Leyden is responsible for, you know, Susie’s appendectomy,” Comerford said.
Selectboard Chair Erika Jensen said her biggest concern is that the rate increases will hurt the town’s employees.
“Leyden is a very small town. I’m more concerned about the employee premiums going up rather than the town’s premiums. We’ll be able to figure that out,” Jensen said.
She added that the impact on the school budget will be bigger as the Pioneer Valley Regional School District has more employees than the town. Further rate increases and impact on the school budget will trickle down and then impact the town budget.
Giarusso said Leyden is looking at other insurance options and will plan on holding a meeting with the town’s employees to keep them in the loop regarding the different directions the town is exploring.
