NYC Unions Agree To Move Retirees To Privatized Health Insurance

 

Mayor Bill de Blasio

NYC Unions Confirm Decision To Shift Retirees Onto Privatized Health Insurance

By Caroline Lewis, Gothamist, July 14, 2021

The leaders of unions representing city workers voted Wednesday to shift retiree health benefits to a new plan under Medicare Advantage, a program in which public benefits are administered through private companies.

The vote, conducted by the Municipal Labor Committee, came out in favor of awarding a city contract for the custom Medicare Advantage plan to The Alliance, a collaboration between EmblemHealth and Anthem Blue Cross.

"The City’s commitment to our retirees is unwavering, and our new plan increases both quality and benefits for retirees while also lowering costs for the City and its taxpayers," Mayor Bill de Blasio said in a statement after the vote.

The move will affect some 250,000 municipal retirees, hundreds of whom marched against the changes in Manhattan last week in the midst of a heat wave. Critics had expressed concerns that access to care would be diminished under the new plan, while some retirees lamented that there wasn’t enough transparency in the process of making the change.

“They should have involved us a year ago when the city was first putting together the request for proposals,” said Stuart Eber, president of the Council of Municipal Retiree Organizations.

His group launched a petition in March to preserve existing benefits and involve retiree organizations in the process of making any changes. It had notched nearly 25,000 signatures as of Tuesday afternoon.

But in their statement on Wednesday, city officials sought to allay any fears. Any doctor who accepts traditional Medicare payments is required to accept payments from the NYC Medicare Advantage Plus Program, they said. That includes specialty hospitals such as Memorial Sloan-Kettering and the Hospital for Special Surgery, as well as most hospitals and doctors across the country.

Currently, municipal retirees have access to Medicare, the federal program that provides health insurance for people older than 65. The city pays retirees’ monthly premiums for Medicare Part B, which covers outpatient care. City funds also provide supplemental coverage for services not covered by traditional Medicare. Shifting retirees onto the new Medicare Advantage plan will cover the city’s contribution and save about $600 million annually, according to the mayor’s office.

The Municipal Labor Committee first agreed to work collaboratively with the mayor’s office to reduce ballooning health costs in 2014. The latest maneuver is part of a broader health care savings plan Mayor Bill de Blasio announced in June 2018.

Leading up to the Wednesday vote, the committee also sought to assure members that the plan under consideration would preserve existing benefits without raising individual costs.

“To ensure quality care and premium-free health coverage for our retirees, the MLC has developed our own group Medicare Advantage Plan—a plan unlike any other MA program in existence,” the labor committee said in materials sent to union leaders.

According to the documents, the savings would be generated through federal subsidies that are available exclusively to Medicare Advantage plans because they reduce the government’s administrative costs.

But some who will be affected by the change say they are wary of any plan under the “Medicare Advantage” label.

Across the country, Medicare Advantage enrollment has exploded in recent years, and many plans include benefits not covered by traditional Medicare. But a 2017 report from the Kaiser Family Foundation (KFF) found that Medicare Advantage plans were not as widely accepted by doctors and hospitals. Another report from KFF released this year found that Medicare Advantage members are more likely to report cost-related problems than those enrolled in traditional Medicare with supplemental coverage.

Eber and other retirees who spoke to WNYC/Gothamist worried that any savings would stem from the Medicare Advantage plan delaying or denying coverage for necessary care.

Michael Mulgrew, president of the United Federation of Teachers and executive vice-chairman of the Municipal Labor Committee, is among the prominent union leaders who support the switch. He has said that retirees’ comparisons of the city’s custom plan to other Medicare Advantage plans on the market are misguided.

Other union leaders raised concerns about the changes, however. James Davis, president of CUNY’s Professional Staff Congress, issued a statement Monday calling for the vote to be postponed because he didn’t have enough time to review information about the contract. (The request was denied.) He said he wasn’t provided a copy of the contract itself, but details of the new plan were provided to union leaders last Thursday.

“Our members are deeply troubled by the MLC’s rush to vote on this proposal,” Davis said in his statement Monday. He added, “This austerity measure opens the door to further cost-cutting and diminished benefits in future contracts.”

Leading up to the vote, WNYC/Gothamist was unable to get a comment on the protests over the proposed changes from Mulgrew or other leaders of the Municipal Labor Committee, including Harry Nespoli, president of the Local 831 Uniformed Sanitationmen’s Association, and Henry Garrido, president of D.C. 37.

Following the vote, Nespoli issued a statement saying, “Maintaining our members’ access to premium-free health care is a key priority of the MLC, and today’s vote will help achieve that goal.”

The new plan will go into effect in January 2022.