9 August 27 - september 2, 2026 dallasobserver.com DALLAS OBSERVER Classified | MusiC | dish | Culture | unfair Park | Contents Under the proposed plan, city health plans will cover only clinical use of GLP-1s for condi- tions like diabetes and fatty liver disease, leav- ing those looking to shed weight to pay the full cost. Fort Worth has also announced plans to cut coverage after costs grew to more than 40% of the city’s pharmacy budget. If the Dal- las council approves the plan, the move is ex- pected to save the city $9.4 million next year. Staff told the council that employees will still have access to other weight-loss drugs through the benefits plan. According to a recent Gallup poll, 11% of Americans used GLP-1s in 2026, a marked increase from 3% in 2024. Another major driver of pharmacy costs was high-cost claims by single members. So far, 25 city employees have made claims exceeding $100,000, costing the city $25 million. Because the health plans are self-funded, the city pays member claims directly for the 24,212 current employees, retirees and depen- dents enrolled. Dallas Fire-Rescue and the Dal- las Police Department are also covered under the plan. The plan Cutting the city’s current preferred provider organization (PPO) plan is expected to save the city roughly $10 million, staff said Wednes- day. If council members choose to keep the plan while minimizing the city’s contribution, employee premiums could rise by approxi- mately 60%. The proposed approach would see the city eliminate its copay plan. It’s expensive and, as city staff said Wednesday, can make it hard to manage costs because members can consult specialists and access other services without a referral from a primary care provider. Around 53% of employees are currently enrolled in the PPO plan. “We need to change the way we’re doing business when it comes to employee health benefits; it is not structurally sound for us to keep going in this direction,” Jack Ireland, the city’s chief financial officer, told the council. This was a very, very difficult decision to make.” Dallas contributes to two other healthcare coverage options, a health savings account and a primary care provider plan. An HSA allows an employee to put money into a tax-free account for healthcare costs, while — as several council members pointed out Wednesday — a PCP plan essentially functions as an HMO. Under the HMO, employees transitioning from the PPO plan will pay lower monthly pre- miums, while existing members will see higher premiums. The premium hikes will also be in- come-based to defray the cost impact and pro- tect employability, with employees making more than $75,000 annually expected to pay the largest contribution. Shifting employees to a PCP plan means the city can more easily manage and predict costs, as employees are largely restricted to in-network providers and must get a referral from their primary care physician to see a specialist. Staff told the council that requiring a relationship with a primary care provider could lead to better preventive care, although some council members questioned whether making it harder to see a specialist would accomplish that. “You might be several months out and have a small cell lung cancer that you already knew from your cough, from your own maybe smok- ing history that you could have immediately gone to seek help, and this is where HMOs can sometimes fail,” council member Cara Mendel- sohn, who said she had heard from a large num- ber of concerned employees, said. Mendelsohn also questioned how long the waiting lists would be to see a primary care doctor and get a referral under the HMO, but staff said they couldn’t answer. She also said the city should look at other benefits, such as paid time off, and that cutting healthcare could affect hiring. Around 94% of providers in the copay plan would be available with the HMO, according to the briefing. Some council members pushed back on the assertion that access to care will not be disrupted, especially in the event of an ur- gent – but not ER-worthy – situation or when outside of Dallas. Adam Bazaldua, a District 7 council member, recalled a time when he broke a bone while in Aus- tin. “It was ex- tremely difficult for me to get any of my services after going to the ER without getting to pass through my PCP, and that was even just getting my cast on, because I couldn’t see a specialist down there,” Bazaldua said. A representative from the city’s insurance broker said employees could contact the Blue Benefit Administrators of Texas when traveling or in urgent situations that don’t require an emergency visit. The city will engage employees in education efforts and question-and-answer sessions be- fore making any changes, Tolbert said. ‘At whose expense’ Even with the cuts to the current plans, the city still expects to contribute $175.4 million toward employee healthcare costs next fiscal year, up from the $152 million staff projected last year. If they do not move forward with cut- ting the copay plan and do not pass the cost onto employees, Tolbert told council members she will likely have to lay off even more em- ployees. Council member Zarin Gracey questioned whether or not the contract negotiating the city’s cost had been properly scrutinized. “We have to make some decisions, and they have to be tough decisions,” Gracey said. “But at whose expense, and who’s going to be held ac- countable to it?” Many of the council members who spoke on the briefing item said they needed more information on how it would actually affect employees. “Employees deserve to be able to look at that information and understand in real dollars what this change could mean for them and their families,” Deputy Mayor Pro Tem Maxie Johnson said. The council will have to decide on a plan by the time it adopts the budget in September to realize savings, staff said. Tolbert said staff would return with additional information on cost impact and access to care. “WE HAVE TO MAKE SOME DECISIONS, AND THEY HAVE TO BE TOUGH DECISIONS.” - COUNCIL MEMBER ZARIN GRACEY That’s gonna hurt from p8 Vote NDBT Best Financial Institution Member FDIC
