NORTHAMPTON — All 73 members of the Hampshire County Group Insurance Trust will see health insurance rates increase by an additional 20% on Oct. 1, ensuring that the trust remains intact, even in the face of significant medical and pharmaceutical claims and the growing popularity of weight-loss drugs.

A nearly unanimous vote for the adjustment by the Insurance Advisory Committee, at the end of a nearly 2½-hour virtual meeting Wednesday, staves off the possibility that the trust might go bankrupt by the end of September. The trust provides insurance for more than 12,000 active and retired public employees for many Hampshire and Franklin county cities and towns, water and fire districts, regional schools and other government entities.

Despite hundreds of thousands of dollars in added costs, members were left with little choice but to support the increase, with Mark Bail, who chairs Granby’s Selectboard, advising others via the chat room to “consider the chaos and financial impact” if each member were left on their own to cover claims starting this fall.

“A ‘no’ vote is going to cause total chaos across all of the units as we scramble to cover our employees,” wrote Eileen Seymour, Montague’s treasurer and collector.

Trust Executive Director Joseph Shea outlined the dire circumstances should the trust go bankrupt.

“We will be running out of money by the end of August, if not September,” Shea said.

He showed that the trust paid out $8.5 million in medical claims in May and then $2.9 million in pharmaceutical claims in July, observing that there has been “astronomical growth” in the cost of drugs. In January 2024, the trust paid out $1.6 million in pharmaceutical claims, many because of weight-loss drugs that have “basically wrecked the finances of the trust,” he said. By comparison, the trust only paid for $350,000 in weight-loss drugs in all of 2023.

This use beyond anyone’s expectation, as Shea puts it, is illustrated by the 400 people currently using Wegovy at a cost of $1,500 per month.

The trust’s reserves have dropped from $20 million in January 2024 to $5 million today, and to get through the period before the rate increase, Shea said the trust has asked Blue Cross Blue Shield to take twice-monthly payments, rather than a payment on the first of the month.

Between January and June, the trust lost $10 million and is now down to three weeks of reserves, instead of three months.

The trust has also been affected by large claims, with 65 valued at more than $100,000, more than double the typical annual number of claims in that amount.

The only vote against the 20% increase came from Southampton officials. Though Chester officials indicated they were against the adjustment, too, Town Administrator Don Humason left prior to the vote.

Southampton Town Administrator Scott Szczebak said he is “shocked” that the copays and premium levels through the trust appear to be similar to what would have been offered 25 years ago, and that the Insurance Advisory Committee has not dealt with the realities and reduced the benefits.

He said there needs to be serious changes in the plan design so people don’t go to the emergency room for the common cold.

“There needs to be behavior changes among our membership,” Szczebak said.

But Shea noted that while the Hampshire County Group Insurance Trust’s premiums are lower than that of the competition, like the Group Insurance Commission and the Massachusetts Interlocal Insurance Association, even with no medical deductibles, there was a “firestorm” and pushback the last time changes were contemplated.

Szczebak said the 20% increase for Southampton could mean layoffs and reduced hours for municipal employees to ensure those costs are covered.

The lack of plan changes came under criticism from other members as well.

Dawn Scaparotti, business manager for the Hampshire Regional School District, wrote in the chat that “relying on the IAC and the Exec Committee for design (change) is clearly not working.”

The large increases are unusual for the trust, which from 2019 to 2022 had no increases in the rates for PPOs (preferred provider organization) and HMOs (health maintenance organization). In 2023, though, there was a 6% increase in both PPOs and HMOs, in 2024 there was an 8% increase in both, and already in 2025 there has been an 18% increase for HMOs and a 20% increase for PPOs.

The biggest design change that is coming relates to use of GLP-1, the weight-loss drug.

GLP-1 will no longer be covered, starting Oct. 1, for general weight loss, but only for those with Type 2 diabetes. Shea said the Insurance Advisory Committee nixed this for July 1, while representatives from the South Hadley Fire District 1 commented that this should have been acted on for Jan. 1, 2025, which may have prevented “a snowball from becoming an avalanche.”

The vote came amid many unknowns, including whether assistance could be coming from state legislators. Lindsi Sekula, executive assistant to the Easthampton mayor, asked in the chat if help from the state would eventually reduce the 20% increase.

Shea said it is impossible to know as these conversations are in their infancy, but he did note that a 10% increase would be insufficient to meet all the demands on the trust.