BIRMINGHAM, Ala. – Alabama’s educator health insurance plan is facing a $380 million shortfall in 2027 that could compete with teacher pay raises in the state budget.
The pressure highlights a growing challenge for Alabama’s education budget: Health care costs for educators are climbing much faster than expected, and the price tag is beginning to collide with other priorities. In 2027, that could mean lawmakers face tough choices between funding insurance, approving teacher raises or finding money for both.
Retirement Systems of Alabama Chief Finance Officer Diane Scott told the Public Education Employees Health Insurance Plan board Wednesday the program will need an extra $380 million in fiscal 2027 just to keep up. By then, costs are projected to reach $1.8 billion – about $500 million more than in 2024. Of that, lawmakers would be asked to cover $1.5 billion…