Record $10.3 billion spent on NYC healthcare, primarily for city employees

The report highlights the significant strain on the city’s budget, which provides medical coverage for approximately 1.2 million municipal workers and retirees. Rising healthcare costs are outpacing inflation and wage growth, creating challenges for individuals, businesses, and government entities.

The analysis indicates that prices, rather than patient utilization, are the primary factor driving the increase in healthcare spending. Outpatient services, particularly those provided at hospital-run facilities and emergency department visits, were major contributors to the spike.

City premium spending through its insurers, the GHI Comprehensive Benefit Plan and HIP-HMO & Other Plans, increased from $8.7 billion in fiscal year 2023 to $10.03 billion in fiscal year 2025, representing a 15.3% cumulative increase. Spending for Medicare-eligible retirees also rose significantly, increasing 19.2% over the same period.

Private health insurance plans offered through the New York State of Health Marketplace, established under the Affordable Care Act, averaged $909 per month in 2025, a 19.7% increase from 2023.

The Health Department stated that the city, as a major purchaser of healthcare, has a vested interest in understanding the factors influencing costs and affordability. Healthcare affordability remains a significant burden for New Yorkers, with rising premiums, deductibles, and prescription drug costs.

Mayor Zohran Mamdani has identified healthcare costs as a key priority within his affordability agenda. The report emphasizes that these costs disproportionately impact low-income New Yorkers, communities of color, and individuals with chronic conditions.

The report, mandated by the Healthcare Accountability and Consumer Protection Act of 2023, details the city’s medical costs through insurance and medical providers.