New York City Mayor Michael Bloomberg wants to competitively bid the city government's health plan contract for the first time in 15 years -- an announcement that seems to have prompted the current insurer to curtail proposed rate increases.
The city's health plan contractor, EmblemHealth, dropped a proposed 10 percent premium increase for roughly one million city employees and retirees covered through its health plan, saving the city an estimated $300 million over the next year, Bloomberg said.
The Bloomberg administration is developing a request for proposals for a new health plan contractor with the Municipal Labor Committee, a coalition of unions, to get ahead of, or at least try to control, healthcare costs for city workers.
New York City's relatively sound and secure public finances are "being threatened by healthcare costs that have grown at an exponential rate and are swallowing more and more of the budget, taking dollars away from public safety, education, and all the areas so vital to our future," Bloomberg said in a media release.
The decision to withdraw the rate increase by EmblemHealth, owner of Group Health Incorporated and Health Insurance Plan, suggests that "by introducing competition and modernizing our healthcare plan, we can improve the care that our employees and retirees get and reduce the amount that city taxpayers have to pay for it," Bloomberg said.
Industry trends and value-based requirements instituted by the city -- including accountable care contracting and physician incentives -- also contributed to Emblem's decision to withdraw its rate proposal, the Bloomberg administration said.
As part of the new request for proposals, Bloomberg said he wants the city's health plan, whether contracted to Emblem or a new insurer, to expand medical group purchasing, develop collaborative and accountable care programs, and create long-term physician and provider incentive programs.
"Allowing companies from around the state and the country to make similar proposals and compete for the city's business could significantly increase the savings that the city and taxpayers could achieve," the administration said.