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December 09, 2010
Free Health Care Cost NY Taxpayers Over $1 Billion, Report Says

A recent report found that free healthcare benefits enjoyed by many local government and school district employees cost New York taxpayers more than $1 billion per year. The report, “Health Insurance Cost Sharing: New York State’s Model for Localities,” is part of a series produced for outgoing Lieutenant Governor Richard Ravitch in an effort to balance the state budget. The State University of New York’s Nelson A. Rockefeller Institute of Government published the report.

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Report Findings
Carol O’Cleireacain, senior fellow at the Institute and author of the report, found that New York State employees and retirees pay an average of 18 percent of their health insurance premiums, while workers in most municipalities and many school districts pay little or nothing. O’Cleireacain estimates that having local government employees pay for a portion of their health care, as state employees do, could save between $1.2 and $1.8 billion annually without diminishing essential services.

Report Proposes Two Plans
The report proposes two plans for increasing municipal employee health care contributions. One would require all public employees to contribute at least as much to their health plans as state employees and retirees do. The second would require all public employers to join the New York State Health Insurance Plan (NYSHIP) and adopt the same contribution rates as those paid by state participants.

O’Cleireacain acknowledges that municipal workers will resist such proposals, writing, “No one is going to volunteer to pay for something they currently perceive as ‘free.’” Yet local employees are already “paying plenty for it,” O’Cleireacain argues, “through lower wages or other benefits and through a smaller number of colleagues helping alongside them.” O’Cleireacain concludes that “avoidance cannot be an option, given the budget challenges facing both the state and its localities.”

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