NYC - Exploding Costs for Employees Health Insurance

In the June 6th, 2025 issue of the Chief, the New York City announced the start of negotiations with EmblemHealth/UnitedHealthcare for a new health insurance plan for employees and non-Medicare retirees.

Warning: United Healthcare is being investigated by the federal government for Medicare/Medicaid fraud ae per a WSJ article May 15, 2025.

The City's current carrier is EmblemHealth/Anthem-Empire Blue Cross. The City will still be using EmblemHealth but has changed from Anthem to UnitedHealthcare for hospital coverage.

Current Cost Problems

It is clear from the chart below (based on NYC-OLR data) that the City has a serious cost inflation problem with the current EmblemHealth insurance coverage. It is, however, not clear whether this is an industry problem or is it a problem made worse by EmblemHealth's operations. In either case the City has an exploding cost problem.

Another scary piece of data is that it appears that Emblemhealth is almost totally dependent on the City for revenues.

EmblemHealth had reported premium revnue of:

• $8.33B in 2022 and
• $7.726B in 2023.

See report on page 6.

The City (plus HHC and Housing) paid EmblemHealth (GHI and HIP) $9,678M in FY-2024 as per OLR's reporting.

The primary problem with the NYC GHI-CBP health insurance plan for employees and non-Medicare retirees is increasing costs.

• In 2014 the City paid $3.416 billion in premiums for GHI-CBP and
  
• in 2024 that amount had increased to $7.927 billion.

That is an 113% increase over 11 years with a 13,000 decrease in employees and an increase of 5,000 in non-Medicare retirees.

Medicare vs EmblemHeath

In contrast to EmblemHealth, in 2015 Medicare spent $10,581 for both Part A plus Part B benefits per beneficiary and in 2023 Medicare spent $14,253 per beneficiary.

That is a 34.7% increase. (2024 Medicare Trustees Report – page 195).

As of the 2015 - 2023 period, the City’s total cost for GHI-CBP was $3.772 billion in 2015 and $6.861 billion in 2023.

That is an 81.9% increase.

In addition to lower cost increases, Medicare is a more effective plan than GHI-CBP and covers a higher risk population.

It would be very interesting if Medicare were able to administer the health claims for the City's employees and non-Medicare retirees and the City reimbursed Medicare.

The Participation Problem

There is also a secondary problem of a shrinking group of participating doctors and hospitals:

• In the NYC metro area
• In the rest of the USA.

I assume these issues are tied into the reimbursement schedules and operating problems between providers and Emblemhealth.

Over the last 11 years the City has obviously not been able to resolve this cost issue between the City and Emblemhealth and it is not clear how the City can resolve it now.