On May 31, 2023, retired employees of NYC filed suit against NYC over the termination of their Medicare supplemental health insurance. The City is doing this to save $450.0 million per year. The Health and Hosptials Corp. and the Housing Authority will also save a total $60.0 million per year.
So why is the City so desparate for money that it choose to strip its older city retirees of their health insurance and force them into a second class private insurance plan (Medicare Advatage)? The City could have attacked any number of other programs. Why the retirees?
The City has previously stated that it is giving these savings to the Health Insurance Satbilization Fund (HISF) which in turn allows the City labor unions to funnel the money into their welfare funds. This is already getting comfusing but this may be why the unions sold the retirees down the river.
The City Budget - FY-2022 to FY-2024
In FY-2022, the City adopted a budget of $98.7B. This year, FY-2024, the City is proposing a budget of $106.7B. See chart below.
Health Insurance Costs from FY-2022 to FY-2024
Health insurance and welfare fund costs are embedded in the personal service category.
Again if you refer to the chart below, you can see that the City's health insurance costs have increased significantly from 2022 to 2024: the City spent
- $5.0B on employee health insurance in 2022
- $5.2B on employee health insurance in 2023
- $5.6B on employee health insurance in 2024
Why did employee health insurance increase $400M in 2024? Is this the money that is going to be given to the union welfare funds?
- $2.1B on retiree health insurance in 2022
- $2.0B on retiree health insurance in 2023
- $3.0B on retiree health insurance in 2024
And why did the retiree health insurance costs go up $1.0B in 2024? Isn't the City saving $375M ($450M full year) by terminating insurance for retirees on Medicare.
Welfare Fund Costs from FY-2022 to FY-2024
The welfare funds have dropped since 2022 but not radically. Quite different from health insurance.
- $1.118B on employee welfare fund benefits in 2022
- $0.858B on employee welfare fund benefits in 2023
- $0.876B on employee welfare fund benefits in 2024
- $0.494B on retiree welfare fund benefit in 2022
- $0.442B on retiree welfare fund benefit in 2023
- $0.449B on retiree welfare fund benefit in 2024
| Category | FY-2022 Adopted Budget | FY-2022 Modified Budget | FY-2023 Adopted Budget | FY-2023 Modified Budget | FY-2024 Executive Budget |
|---|---|---|---|---|---|
| Total Budget | |||||
| Personal Service | $53.4B | $54.4B | $52.9B | $52.5B6 | $55.6B |
| Other Than Persanal Service | $45.9B | $53.4B | $47.7B | $52.4B | $48.3B |
| Debt Service | $1.3B | $6.3B | $2.4B | $4.5B | $4.8 |
| Less: Intra -City Expenditures | -$1.9B | -$2.3B | -$2.0B | -$2.3B | -$2.0B |
| Net Total | $98.7B | $111.8B | $101.1B | $107.1B | $106.7B |
| Fringe Costs | |||||
| Health Ins.-Employees | $5.880B | $5.061B | $5.399B | $5.164B | $5.640B |
| Health Ins.-Retirees | $2.142B | $2.142B | $2.260B | $1.969B | $2.959B |
| Welfare Funds-Employees | $1.040B | $1.118B | $0.938B | $0.858B | $0.876B |
| Welfar Funds-Retirees | $0.491B | $0.494B | $0.442B | $0.442B | $0.449B |
| Pensions | $9.921B | *** | $9.305B | *** | $9.525B |
