NYC Healthcare Costs Hit Record $10.3 Billion
Employers funding health plans should budget for premium growth driven by outpatient prices, not patient use.
Updated on Nov. 3, 2026 in Healthcare
Live Poll
Are healthcare costs getting better or worse for your household?
New York City spent a record $10.3 billion on healthcare in the last year, according to a city Health Department review. The city's employee and retiree premium spending rose from $8.7 billion in FY23 to $10.03 billion in FY25, affecting insurers and benefits costs for 1.2 million municipal workers and retirees.
Why it matters
The review attributes the rise primarily to prices rather than patient use, and outpatient services, led by emergency-department visits, were the biggest driver of the spike. For operators, that points to benefit-plan costs that keep climbing even when utilization is steady.
Premium spending for active employees and pre-Medicare retirees grew from $8.7 billion in FY23 to $10.03 billion in FY25, a 15.3% increase over two years. Outpatient spending rose 13% at GHI and 17% at HIP HMO between 2024 and 2025.
The players
New York City Health Department
The city agency that publishes public health and healthcare cost reviews and oversees city health programs.
GHI Comprehensive Benefit Plan
An insurer whose plan carries a share of the city's employee and retiree premium spending, with outpatient costs up 13% from 2024 to 2025.
HIP-HMO & Other Plans
A managed-care insurer serving the city's workforce, with outpatient spending up 17% from 2024 to 2025.
The details
The city's premium spending runs through insurers GHI Comprehensive Benefit Plan and HIP-HMO & Other Plans. Outpatient services drove the largest share of the increase, with emergency-department visits accounting for the biggest portion of outpatient spending. The review found that prices, not patient use, are the primary driver of rising costs. Private insurers and not-for-profit hospitals are largely regulated by the state and federal governments, which limits the city's direct control over those prices.
Timeline
FY23: City premium spending was $8.7 billion.
FY24: City premium spending rose 7.4% to $9.34 billion.
FY25: City premium spending reached a record $10.03 billion.
2025: State marketplace private plans averaged $909 per month.
November 2, 2026: The Health Department published its report on healthcare spending.
Market Landscape
The city's FY23-FY25 premium series shows spending rising each year, with FY25 setting a record. New York State ranked second in per capita healthcare spending, behind Alaska, placing the city's trend within a higher-cost state market.
Operators who sponsor employee health plans should model premium growth closer to the two-year pace of roughly 7% annually rather than assuming flat renewals. Review outpatient and emergency-department utilization in your own plan data, since that is where the city's spending increase concentrated.
The takeaway
Price, not patient use, is the main driver of rising healthcare spending, so benefit budgets should track unit prices rather than volume alone. Review your renewal documents and compare outpatient cost trends year over year before the next plan cycle.
Further reading
For broader context on how healthcare costs are reshaping employer budgets, see Healthcare coverage on We are Main Street.
Source note: This article includes information reported by New York Post.
Live Poll
Are healthcare costs getting better or worse for your household?
