Annual health insurance premiums for active and retired state government employees in New York have risen $1.6 billion (128 percent) since fiscal 1999-2000 and are expected to increase by another $838 million (30 percent) over the next four years, according to the 2009-10 Enacted Budget Financial Plan.
The table below, from p. 156 of the Financial Plan, provides the details.
Unlike pensions, retiree health insurance costs–also known as Other Post-Employment Benefits, or OPEB–are financed on a pay-as-you-go basis. But the $1.1 billion budgeted for this purpose in 2009-10 is actually a form of deferred compensation earned by employees years or even decades ago. It does not reflect retiree benefits that will be earned this year by active employees, and thus grossly understates the true cost of the state’s health insurance promises to its workforce.
A new government accounting standard has required state and local governments to begin calculating and reporting OPEB costs more fully and accurately. New York State’s unfunded liability for retiree health care came to $50 billion in fiscal 2007-08 but “may increase by as much as $9 billion” in fiscal 2008-09, the Financial Plan says. To pay off the 2007-08 liability on a 30-year amortization schedule, the state would need to deposit an additional $2.7 billion into a dedicated OPEB trust fund this year. But that’s not happening, so the $2.7 billion will be recorded as an addition to the state’s net liabilities.
Meanwhile, in just two years, New York City’s unfunded liability for OPEB has risen from $54 billion to $63 billion.
You may also like
New York’s Proposed ‘MCO Tax’ Would Generate a Fraction of What Lawmakers Expected
The Hochul administration's proposed "MCO tax" would generate far less than the $4 billion in extra federal aid anticipated by state lawmakers when they approved the concept this spring, according to documents obtained by t Read More
How 1199 Earns its Reputation as Albany’s No. 1 Labor Power Broker
For the fourth time in six years, the president of New York's largest health-care union, George Gresham of 1199SEIU, has won the top spot on the "Labor Power 100" list from City &am Read More
New York Runs Away from the Pack on Medicaid Spending
New York's per capita Medicaid spending jumped 14 percent in 2023, moving it further ahead of the rest of the country, recently released nationwide data show.
In the federal fiscal year that ended last September, New York spent $94.6 billion Read More
Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough
Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget.
Read More
New York’s Medicaid Spending Is Running Billions Over Budget
New York's Medicaid program ran billions of dollars over budget during the first half of the fiscal year, adding to signs of a brewing fiscal crisis in Albany.
According to the fro Read More
Hospital Lobby’s TV Campaign Spreads Misinformation About Medicaid
As New York's health-care industry agitates for more money from the state budget, two of its most influential lobbying groups are airing TV ads that make alarmist and inaccurate claims about Medicaid. Read More
Hochul’s ‘Pay and Resolve’ Push for Hospitals Triggers Déjà Vu
Two years ago last week, I wrote in the Daily News about how then-Governor Andrew Cuomo was pushing a costly change to insurance law on behalf of a hospital group that had supported his campaign through a fund-rai Read More
The Looming Collapse of a Long-Term Care Insurer Raises Questions for DFS
As the Hochul administration presses for the creation of a "guaranty fund" to bail out failed health insurers, the state is quietly moving to seize a small company that could be the fund's first target. Read More