New York Retired Workers Celebrate Medicare Switch Court Victory
This article was published in partnership with THE CITY.
A years-long fight over a planned change to cut health coverage costs for retired city employees came to a head on Thursday with a judge’s ruling that allows retirees to choose to keep their current plan.
Judge Lyle Frank’s ruling in Manhattan State Supreme Court authorizes a joint city and union effort to move health coverage for retired city workers away from traditional health insurance to a privatized Medicare Advantage program before April 1 to continue. But the city must now let current and future retirees opt out of the change and keep their current health care free.
The decision was a partial victory for the city, which under former mayor Bill de Blasio reached an agreement with municipal unions to continue health insurance change and other cost savings as existing workers seek raises.
But it’s also a victory for the group of retirees who have sued to stop the change, citing fears of higher costs, smaller networks and greater administrative barriers to accessing health care and to preferred physicians under the new plan.
The city had planned to force retirees to join the new private Retiree Health Alliance plan, or pay $191 per person per month to maintain their current coverage. Retirees currently receive their insurance package — traditional Medicare plus an additional program for treatments not covered by Medicare — for free.
Especially for retirees at the bottom of the city’s pension ladder, which is bottoming out $15,000 per yearthis cost threatened a significant financial burden.
by Frank ordered said that as long as the current retiree healthcare program, known as GHI Senior Care, continues to exist as an option, it should be offered free to retirees.
Steve Cohen, attorney for the New York Public Service Retirees Organization, group who sued to block the switch, said Frank’s decision was “an unequivocal victory” for retirees.
“They are happy to be protected and to have their doctors. We are grateful to the judge for seeing through everything the city tried to put forward,” he said.
But the decision also creates a new complication for the town hall and the municipal unions, by disrupting the expected increase in funding for union members’ health benefits through the reinvestment of savings from the plan.
Michael Mulgrew, president of the United Federation of Teachers, urged a rework of the working agreement to ensure the promised reinvestment is still delivered.
“While the NYC Medicare Advantage Plus plan is strong, the program has suffered from serious implementation issues and poor legal arguments, particularly from the city. Our retirees deserve better,” Mulgrew said in a statement.
He announced that the UFT was withdrawing its support for the April 1 start date “and will urge the municipal labor committee to suspend its efforts to launch the program until all implementation and legal issues are resolved. “.
And Henry Garrido, director of District Council 37, the city’s largest municipal union, said the decision would force his labor organization and others to renegotiate with the city. DC 37 members are working under a contract that expired in May, and the union is seeking to establish a new wage and benefits model for the city’s entire workforce. “But that probably won’t happen until we find a solution for the health contract,” he noted.
A City Hall spokesperson said: “We are reviewing the court’s decision and weighing our options.”
JThe city’s legal department did not immediately respond to a request for comment.
Barriers to care
In the nearly a year since details of the new medical plan became public, retirees have expressed skepticism that it will provide benefits equal to what they currently receive, while saving taxpayers $600 million a year.
Almost all Medicare Advantage plans include fewer doctors than traditional health insurance does. The city has repeatedly asserted that the Alliance plan will allow retirees to see any doctor who accepts Medicare, which the large majority doctors do. But pensioners question this assertion, testify at hearings and submitting affidavits in state court that their doctors told them they wouldn’t participate in the plan or that they didn’t know it.
The new scheme will also make it more difficult for retirees to access many treatments.
Under Medicare Advantage, healthcare providers will need to get pre-approval from insurance companies before performing dozens of procedures or treatments, including certain doctor visits, mental health treatments, home health care services and tests such as X-rays and blood tests, legal documents To display.
Under their current health insurance, this type of pre-approval is only required for a very limited number of treatments, such as transplants and doctor-administered medications. Most treatments do not require prior approval.
“We’re so grateful that we won’t have the $191 penalty each month, which we can’t afford, and we’re so grateful that we won’t be required to have prior authorizations for so many medical treatments. currents,” said Sarah Shapiro. , a retired member of the United Federation of Teachers union.
Now, Retiree Response leaders are gearing up to make sure retirees know they can choose to keep their current Medicare coverage for free.
“We’re trying to send the message to retirees that they still have time to retire, if they want to,” Cohen said.
But the pensioners’ victory is likely to be temporary. Under Frank’s order, the city has the right to drop the GHI Senior Care plan and force all retirees to participate in the fully private Medicare Advantage program in the future.
Cohen said any move to eliminate elder care would have to be negotiated between the city and municipal unions. “Is it in the interest of the active [employees] or retirees? Let’s see if everyone will do the right thing,” he said. The decision is also subject to appeal.
Ralph Francisco, a retired paramedic lieutenant with the New York Fire Department and a board member of the Public Service Retirees Organization, said he hoped the city wouldn’t appeal the decision. .
“Please drop it. We deserved these benefits, we fought for these benefits, the judge said we were right. Do the right thing, Mr. Mayor, drop it,” he said.
During his mayoral campaign, Adams expressed concerns about the plan, calling it a “bait-and-switch” that would “traumatize” retirees.
“Some of the stories I hear about payout increases, you’re on a fixed income – it’s devastating,” he said at a campaign event in October 2021.
But once elected, Adams started singing a different tune. On February 6, he published a declaration plan support. “I believe the new program will be in the best interest of the city’s retirees and taxpayers, who can save $600 million a year,” Adams said, noting that the plan “will continue to provide premium-free health coverage to retirees, as well as new and increased benefits.
As a retiree from the New York City Police Department, Adams’ own health benefits will be affected by the change.
With Adams backing the change, retirees turned to City Comptroller Brad Lander to block the plan. lander expressed concerns about the Switch last month, but it’s not clear he has much power to prevent it.
Even if the comptroller opposes a contract, municipal law allows the mayor to cancel them and enact it.
The genesis of the Retiree Health Alliance plan, which will be managed by a partnership between insurance giants EmblemHealth and Empire Blue Cross Blue Shield, dates back to 2014 OK between de Blasio and the main municipal unions. In this agreement, the unions promised several billion dollars in health care savings in exchange for raises for current employees.
Focus on New York announced the news of the planned change in April, and in September the New York Public Service Retirees Organization filed a lawsuit to block it.
In October, Judge Frank issued a temporary injunction against the plan, and in December he delayed its implementation until April 1, leaving open the possibility of further delays. The plan was originally scheduled to take effect on January 1.
Frank’s December order required the city to extend the period retirees are allowed to opt out of the Medicare Advantage plan until June 30, a position he reaffirmed in Thursday’s order.
About 47,000 retirees — nearly 20% of retired city workers — have already opted out of the plan, Fortune reported earlier this week.
The deployment of the plan was marred by confusion and inaccuracies. Last fall, the city mailed out retiree plan enrollment guides containing false information on the main aspects of the new plan. The city initially refused to send retirees a corrected version of the guide, citing an estimated cost of $825,000 and a “global paper shortage.” In his December order, Frank asked the city to mail corrections to any retirees who received inaccurate enrollment guides.
Francisco, the retired paramedic, said Thursday’s decision “meant a lot” to him.
“I didn’t want to be told that I needed to get permission to go to a doctor, get a referral to go for an MRI, and have an insurance company tell me, ‘ Well, do you really need that?’ ” he said.
For retired firefighter John Gilleny, the whole saga has a moral. “I would like to say that the statement that you can’t beat City Hall is wrong,” he said.
Additional reporting by Reuven Blau.