City Council Approves Monthly Increase for Retiree Health Plan

SAN ANGELO, TX — The San Angelo City Council voted 4–2 Tuesday morning to approve a $13.52 monthly premium increase for retirees age 65 and older enrolled in the city’s Medicare Advantage plan, following a presentation from Human Resources Director Veronica Sanchez.

The vote finalizes the funding portion of the city’s over-65 retiree coverage under Humana, which was selected as the provider earlier this month. The new plan reflects a 4.18% increase, the lowest bid received this year, with a total additional cost of $62,624.64, according to city records.

Sanchez said the city issued bids for the coverage after last year’s 65% premium increase forced the city to absorb an extra $500,000 to avoid charging retirees or changing benefits. This year’s smaller increase, she said, is necessary to help stabilize the city’s self-insurance fund, which carries an unfunded liability of $3–6 million.

Sanchez said, “Based on the challenges that we expressed at the last meeting for the fund in general, an unfunded liability of anywhere between three to six million based on claims activity and the development of a healthy fund balance, the recommendation is to increase the premium for this group, the post-65 retiree group, by that $13.52. This means their total premium would be $33.96 to cover that increase.”

City Manager Daniel Valenzuela said the city’s goal was to balance fiscal responsibility with honoring long-standing commitments to retirees.

“There’s two sides of me, and I’ll share both of them,” Valenzuela said. “My heart and the commitment is with retirees, but my business thinking on this is solvency, and how can we take care of the insurance that we have for everyone at this point. That’s a struggle that I have.”

Several council members acknowledged the sensitivity of the issue. Mayor Tom Thompson made the motion to approve staff’s recommendation, saying, “I fought to keep it last year when we tried to get rid of all of it.”

Councilmembers Mary Coffey and Karen Hesse-Smith voted against the measure, while Harry Thomas, Tommy Hiebert, Patrick Keely, and Thompson voted in favor.

Former city officials Russell Smith and Judge Allen Gilbert, speaking on behalf of city retirees, urged the council to honor the decades-old promise of continued health coverage made when employee pay was far below that of other cities.

Gilbert said many of the city’s long-time retirees live on modest fixed incomes.

“$13 is a lot,” he said.

The approved 4.18% increase will take effect with the 2026 Humana plan. During the discussion, several officials suggested the city could revisit options next year, such as tiered coverage or benefit adjustments, to help manage future costs.