Health insurance hits municipal budgets, taxpayers hard

SCHENECTADY - Though each municipality has its own problems to battle this budget season, health insurance consistently gets the blame for the skyrocketing costs passed down to taxpayers.

For years, local leaders have pointed to the state-negotiated increases as an issue. Health insurance isn't a cost that can simply be cut from the budget, and the state Department of Financial Services approved another increase for 2027.

On average, 2027 rates for individual plans will increase by 6% and small group market plans will increase by 8%. It's another cost - alongside energy prices, supplies and inflation in general - that is impacting folks at home as well as the municipalities running local governments.

"Insurance has gone wild. State retirement, which all municipalities pay into, has increased. The normal wage of a person has increased, but not nearly to the level of these increases," said Village of Scotia Mayor David Bucciferro. The village runs on a July 1 to June 30 fiscal year and passed its 6.08% increase in April.

"You get to the point where you're either going to lay off staff and cut services," he continued, "or you make a decision that you're going to increase taxes."

Personnel and employee benefits are frequently the bulk of a municipality's budget. In Saratoga Springs, the expenses accounted for 83% of the city's budget. The city is proposing an 18% tax increase.

The Town of Niskayuna is also proposing an 18% tax increase. Health insurance alone is rising by 22% for current employees and 48% for retirees. The town reduced highway fund spending by 16% and increased general fund spending by 2.8%, but Town Supervisor Erin Cassady-Dorion said the contractual and benefit costs outweighed the cuts.

Though the Rotterdam Town Supervisor has laid much blame on prior administrations' mismanagement, health insurance costs increased by 21.1% in the tow n that's asking for a 34% tax rate increase.

In the city with the most attention-grabbing headlines, Schenectady's 42.5% tax increase proposal comes with a 12.7% increase in hospital and medical insurance expenses.

"We try and manage it, but it's just the nature of healthcare now," Mayor Gary McCarthy said.

Insurance providers originally asked the state for much higher rate increases-20.6% for the individual market and 23.7% in the small group market. But the requests were not made-up numbers with no driving factors.

The cost of delivering health services has spiked in the last few years, particularly the cost of drugs. According to the American Hospital Association, hospital expenses rose 7.5% in 2025, with drug prices rising by 13.6%.

CDPHP, which covered 375,669 people across affiliates in 2025, is expecting $110 million in losses over 2026 and 2027, a spokesperson told the Gazette when the company pitched its rate increases in July. Alongside rising costs, the company cited the 2023 change in the Medicare Wage Index.

Several officials said the top thing residents need to know is that the costs impacting their household checkbooks are hitting local governments too. Health insurance is one of them.

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