The Government of the Virgin Islands will pay approximately $9.5 million more for Cigna medical coverage in fiscal year 2027 after the insurer imposed a 7 percent premium increase covering active employees and non-Medicare retirees. When all of the government’s insurance renewals under consideration are combined — including medical, dental, Medicare Advantage, life, vision and voluntary coverage — the package will cost 5.8 percent more than the current year.
The increase comes even as medical claims costs declined over the previous year, prompting senators on Thursday to question why the government continues to face annual premium increases. It also arrives at a particularly difficult moment for the territory's finances. The Consortium reported this week that lawmakers have described the government's fiscal condition as “precarious,” with individual income-tax collections down $31.7 million and fiscal year 2026 projected to close with a nearly $59 million deficit. As of August 7, government health insurance payments had already reached $203.8 million during the current fiscal year.
Beverly Joseph, chairperson of the Government Employees Service Commission Health Insurance Board of Trustees, detailed the proposed fiscal year 2027 renewals during Thursday's Committee of the Whole hearing. For active employees and non-Medicare retirees covered by Cigna, medical claim expenditures through June 2026 were “equal to 92% of premium, excluding administrative and other plan expenses.” Monthly claims costs decreased 6.6 percent from the prior year, while enrollment declined 1.7 percent.
Cigna's initial underwriting calculation called for a 17 percent premium increase. At the Board's request, the insurer applied its historical underwriting methodology, reducing the proposed increase to 10 percent. Further negotiations brought the final renewal increase down to 7 percent, Ms. Joseph testified. The agreement “preserves the existing plan design and prescription drug program management,” she said, meaning deductibles, copayments and out-of-pocket maximums will remain unchanged.
While the Cigna medical component accounts for the largest increase, other parts of the government’s insurance package will see smaller increases or no change at all, resulting in a 5.8 percent increase when all of the proposed renewals are combined.
Several senators questioned why a premium increase remained necessary when monthly claims costs had fallen. Christian Bergstrom, vice president of Employee Benefits Consulting at Gehring Group, said the decline did not eliminate the underlying pressures on the plan.
He explained that Cigna's calculation uses the previous 12 months of claims experience, including “large claim activity,” while also accounting for medical inflation, which he said is “probably one of the highest it's been in twenty years.” The formula also considers the insurer's profit margin, other services included in the program and demographic changes such as “reduced lives,” Mr. Bergstrom said.
“At a 92% loss ratio, you still need the necessary ingredients so that the plan can still become sustainable for the following years,” he told Senate President Milton Potter. Mr. Bergstrom said the 7 percent increase represents Cigna's “best and final offer.”
The continued burden of catastrophic medical claims emerged as one of the most significant drivers of the plan's costs. Deepali Sahi, a Cigna Healthcare account executive, said the number of high-cost claimants fell by only two compared with fiscal year 2025. Between October 2025 and August 2026, Cigna paid approximately $93.4 million in high-cost claims.
Ms. Joseph said the impact of those claims is magnified by shrinking enrollment. At least 12 members had incurred claims exceeding $2 million during the current plan year, she said, with that number increasing to 14 in September, the final month of the policy period. Several of those individuals are managing multiple chronic illnesses simultaneously.
“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,” Ms. Joseph said.
Senator Carla Joseph characterized the 1.7 percent enrollment reduction as “nominal,” but Mr. Bergstrom said even that decrease has a meaningful financial impact. It “reduces the premium approximately 300,000 a month, which is $3.6 million of premium loss for the year,” he testified.
Senator Clifford Joseph asked whether adding the V.I. Water and Power Authority's employees to the government's insurance pool could increase enrollment and reduce costs. WAPA maintains its own health insurance plan, and Mr. Bergstrom said joining the central government's program would not benefit the utility under its current arrangement. “It would increase WAPA's cost to come onto this plan,” he explained.
The explanations did little to ease senators' broader concern about the trajectory of government health insurance spending.
“Every year since I've been in this institution, I've seen that we've had to absorb increases as they come along…I'm just hoping that we can see a locked-in rate one of these years,” Senator Angel Bolques Jr. said.
Senator Novelle Francis Jr. said government insurance costs have seen an “escalation of about $80 million over these six to eight years. When does it stop?”
Senator Kurt Vialet similarly called for a broader review of the system. “This is a quarter of a billion dollars that the government is paying every single year,” he said, arguing that continued increases reduce the money available for other government priorities. “We have less money for central government. We have less money for education. We have less money for every other aspect…”
Last year's renewal also produced a significant increase. The Consortium reported in September 2025 that the fiscal year 2026 insurance package carried a 13.7 percent overall cost increase, while the Cigna medical component was projected to add approximately $20.2 million to the central government's cost. That renewal also resulted in higher deductibles. The fiscal year 2027 proposal is smaller by comparison and leaves the current deductibles, copayments and out-of-pocket maximums intact.
The Board also negotiated an additional $500,000 from Cigna for wellness initiatives, raising available wellness funding to $1.5 million. Of that amount, $750,000 will support approved gym memberships and personal training, while another $750,000 will be available for “approved wellness activities, events, and incentives,” Ms. Joseph said.
Cigna will also provide six two-year nursing scholarships, on-site customer service representatives, health improvement offices, health coaches and mobile vans. The insurer will continue programs including Omada's Pre-Diabetes Prevention Program and MotivateMe.
Dental insurance will also become more expensive. Cigna dental premiums are set to rise 6 percent, with Ms. Joseph reporting that dental claims expenditures were “equal to 104% premium.” The Legislature's account of the hearing said claim costs per employee per month increased 2 percent over the previous year and that the 6 percent premium increase is consistent with a contractual annual cap negotiated by the Board.
Rates for Cigna's voluntary Accidental Injury, Critical Illness and Hospital Care products for active employees will remain unchanged. Those products are paid entirely by participating employees and carry no cost to the Board or central government.
There will likewise be no increase in the combined medical and prescription drug premium for retirees over age 65. UnitedHealthcare remains the only insurer offering the group Medicare Advantage option for those government retirees, with the combined medical and prescription premium remaining at $330.24 per person per month.
The government's projected share of that program is just over $17 million, while retirees are expected to contribute $8.8 million, producing an overall program cost of approximately $25.8 million. There will be no changes to copayments or deductibles in 2027.
Those retirees will receive an increase in their quarterly grocery and over-the-counter benefit, from $40 to $50. To pay for the enhancement, however, the Board “elected to eliminate the $200,000 Wellness Incentive Fund,” Ms. Joseph said.
The Board, working through Gehring Group, also negotiated no premium increase for the government's basic life and accidental death and dismemberment coverage for the next two years. The central government's cost will remain approximately $425,000.
Vision coverage will increase modestly. Employee-only or retiree-only coverage will rise from $1.98 to $2.09 per pay period, while employee or retiree family coverage will move from $5.22 to $5.51 per pay period. The Legislature independently confirmed those amounts in its summary of the hearing.
Speaking for the Health Insurance Board, Ms. Joseph said the recommendations “provide the lowest overall cost reasonably available, while maintaining viable and competitive benefit programs.”
Lawmakers took no vote Thursday because the Legislature was sitting as the Committee of the Whole. Bill No. 36-0389 would ratify the first renewals of the government's group life and accidental death and dismemberment coverage and group vision insurance, the third renewal of group medical health insurance, and the second renewals of the employee-paid critical illness, accidental injury and hospital care policies. The measure was submitted by Senate President Milton Potter at the request of the governor.
Lawmakers are expected to consider the measure during Friday's legislative session.
