City Healthcare Spending Hits Record $10.3 Billion
New York City's healthcare costs for employees and retirees climbed to a record last fiscal year, driven largely by outpatient services.
Updated on Nov. 3, 2026 in Healthcare
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New York City spent a record $10.3 billion on healthcare in the last year, according to a city Health Department review. City premium spending for active employees and pre-Medicare retirees rose from $8.7 billion in FY23 to $10.03 billion in FY25.
Why it matters
The city provides medical coverage for 1.2 million municipal workers and retirees, so rising premium costs directly shape the city's budget. The review attributes the growth primarily to prices rather than to increased patient use.
City premium spending rose 15.3% over two years, with Medicare-eligible retiree spending up 19.2% to $643.1 million. Outpatient costs rose 13% for the GHI plan and 17% for the HIP HMO plan between 2024 and 2025.
The players
New York City Health Department
The city agency that conducted the review of medical costs and spending across the municipal workforce plans.
GHI Comprehensive Benefit Plan
One of the two insurers through which the city's employee and retiree premium spending runs.
The details
Outpatient services were the biggest driver of the spike in city workforce plan spending, with emergency-department visits accounting for the largest share. Premium spending runs through insurers GHI Comprehensive Benefit Plan and HIP-HMO & Other Plans.
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.
Market Landscape
New York State ranked second in per capita healthcare spending, behind only Alaska, placing the city's record outlay within a high-cost regional market. Private insurers and not-for-profit hospitals in the state are largely regulated by state and federal governments.
Prices rather than patient use are driving the increase, which means premium costs for municipal workers and retirees continue to climb. The marketplace figures show private plans averaged $909 per month in 2025, up nearly 20% over two years.
The takeaway
Price growth, not greater use of care, is the main force behind rising healthcare spending, so cost pressures on public budgets and household premiums are likely to persist. Readers covered by city or private plans may want to review their plan's outpatient and emergency-care coverage details.
Further reading
For more on rising medical costs, see Healthcare coverage of premium and provider pricing trends.
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