Why we negotiated a new plan
New York City is one of the last cities in the country where municipal employees and retirees have premium-free health care coverage, meaning we do not have to pay the monthly fees, or premiums, associated with health insurance coverage.
It has become increasingly more difficult to preserve this crucial benefit given the alarming rate at which health care costs are rising.
Twenty years ago, New York families on average paid about $2,000 in out-of-pocket premiums for health care. Now, they pay over $7,500 annually – before deductibles and copays. City workers, on the other hand, have not had to pay any health insurance premiums over these years, thanks to negotiations by the MLC and its unions. See the chart below.
Family premium contributions for private sector employers in NY
Average total Premiums and employee contributions for private sector establishments in the New York area.
Note: 2007 data was not collected for the insurance component.
To be clear: This doesn't mean that our health care is free. Instead, it means that the city pays the premiums associated with health care for us. Unions have fought hard to maintain this benefit, but the cost of health care continues to skyrocket.
Today, the city pays over $31,000 per year for family coverage, which is almost double the $16,000 per year the city paid 10 years ago. The city pays nearly $12,000 per year for individual coverage, which is double the$6,000 per year 10 years ago. See the chart below.
Cost of premiums
If costs continue to rise, the city will try to shift the cost of premiums onto us, which we cannot accept. New York City's municipal unions have a long history of looking for creative solutions to reduce health care costs in our effort to preserve our high-quality, premium-free health plans. This negotiated acquisition process was no exception: We secured improved benefits for less.
How did we do this? By leveraging our buying power.
In the GHI CBP plan alone, the MLC represents 750,000 city workers, pre-Medicare city retirees and their dependents. Getting our business would be a win for any insurer. As a result, health insurance companies competed for us as customers and came to the table with reduced prices and an enhanced plan that they wouldn't offer to smaller groups.