[ New York City’s Municipal Labor Committee voted March 9 to
scrap some of the best retiree health care coverage in the country.
The change would put 250,000 city retirees into a for-profit Medicare
Advantage plan run by Aetna.]
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NEW YORK CITY RETIREES FIGHT THEIR OWN UNIONS TO STOP CATASTROPHIC
HEALTH CARE CUTS  
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Jenny Brown
March 10, 2023
Labor Notes
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_ New York City’s Municipal Labor Committee voted March 9 to scrap
some of the best retiree health care coverage in the country. The
change would put 250,000 city retirees into a for-profit Medicare
Advantage plan run by Aetna. _

Union retirees protested the mayor's and the the Municipal Labor
Committee's effort to change a city law protecting their health care
benefits in January. The law is unchanged but on Thursday the MLC
voted to shunt up to 250,000 city retirees into a , for-profit
Medicare Advantage plan anyway. (Photo: Gloria Brandman for
Cross-Union Retirees Organizing Committee (CROC) // Labor Notes)

 

Defying two years of protests and lawsuits by union retirees, New York
City’s Municipal Labor Committee voted March 9 to scrap some of the
best retiree health care coverage in the country. The change would put
250,000 city retirees into a for-profit Medicare Advantage plan run by
Aetna.

Twenty-six unions in the MLC voted no, while others abstained. But
their votes were swamped by the votes of the largest unions on the
committee, AFSCME District Council 37 and the New York United
Federation of Teachers.

Retirees and active members protested during the MLC vote and marched
to City Hall. They are asking the city council to strengthen the law
protecting retiree health care. The NYC Organization of Public Service
Retirees promises to sue.

The New York City fight has wider implications as for-profit Medicare
Advantage insurance companies come under fire for second-guessing
doctors
[[link removed]], blocking
patient care [[link removed]],
and ripping off the public
[[link removed]] while
they reel in record profits.

NUMBERS DON’T ADD UP

States and municipalities have increasingly
[[link removed]] tried
to put retirees into Medicare Advantage plans once they reach age 65.
Where unions have fought the change, as in Washington state and
Vermont, they have been able to prevent the switch. But in New York
City, retirees have been fighting not just the city but also their own
unions to keep from being shunted into a for-profit plan.

Public employees in New York City have given up a lot over the years
to keep their ironclad retiree health care coverage, and it paid off
until now. Along with paying traditional Medicare premiums, the city
pays for a wrap-around supplement called Senior Care that picks up
nearly all costs not covered by Medicare, along with drug benefits.

Leaders of District Council 37 and the UFT claim the Medicare
Advantage plan will save money and provide the same coverage. But the
numbers don’t add up, said Len Rodberg, a retired City University of
New York health policy expert who will be affected by the change.
“Medicare Advantage starts out 20 percent below what Medicare does,
in terms of actual money available to spend on health care,” Rodberg
said.

Traditional Medicare pays 3 percent overhead. By contrast, Medicare
Advantage plans have to make a profit for shareholders, and they also
pay huge executive salaries and maintain enormous staffs to protect
their profit margins by delaying and denying care. In these for-profit
plans, Rodberg said, “basically anything that costs money would need
pre-approval.”

MLC leaders said their consultants told them the difference would be
picked up by the federal government, Rodberg said. But while the
federal government used to subsidize for-profit Medicare Advantage
plans 20 percent over what they paid out for traditional Medicare
patients, that subsidy is now down to 2 percent.

Medicare Advantage plans also cut costs by contracting with certain
providers. This means the insurance company will only pay for care
provided by certain doctors or hospitals. For retirees who move to
states with spotty coverage, Rodberg said, “suddenly their Medicare
card won’t work, cause they’re in Medicare Advantage, not
Medicare.”
 

QUICK REACTION

Retired teacher Gloria Brandman heard about the change in 2021 from
friends in PSC-CUNY, the union of faculty and staff at the City
University of New York. She and other teacher retirees swung into
action, holding a webinar that drew 400 people. The recording of the
webinar circulated widely, leading to a whirlwind of protest which
forced UFT’s president, Michael Mulgrew, to hold a town hall where
he tried to sell the change.

Retirees from the teachers, AFSCME, and several uniformed service
unions formed a Cross-Union Retirees Organizing Committee to fight.
Brandman and other CROC activists hounded newly elected Mayor Eric
Adams at every opportunity.

They rallied when the MLC met: “We marched on the hottest day of the
year,” Brandman recalled. They held a Valentine’s Day “Don’t
Break Our Hearts, Mayor Adams” event.

In October they held a “Halloween Horror” press conference, saying
“Mayor Adams, You’re Scaring Us to Death.” (“Death masks
optional,” said the invitation flier).

NO MAGIC SAVINGS

A city law requires that all the health care options the city provides
be premium-free. That law turned out to be an important backstop, and
the NYC Organization of Public Service Retirees sued to get it
enforced. A judge agreed that it was against the law for the city to
charge seniors an extra $191 per month to stay in original Medicare.

So Adams and the MLC leadership asked the City Council to change the
law. They walked into a buzz saw. After vigorous protests and reams of
testimony from retirees and active union members objecting to the
change—which could have undermined active members’ health care as
well—the City Council declined to alter the law.

In her testimony before the council, Jen Gaboury, PSC chapter chair at
Hunter College said, “We know these ‘savings’ don’t come from
some brand of private business magic. If you get this money, you’ll
be denying care and/or delaying treatment to your own people, older
city workers.”

CONTRACTS HELD HOSTAGE

Part of the problem is that the unions created a $600 million hole in
the last round of contracts and they’re trying to plug it now. They
negotiated to use a health care stabilization fund, designed to
equalize costs between health plans for active members, to bolster
wage increases. Now the fund is broke and that threatens to raise
health care costs for active members.

At the City Council hearings, PSC-CUNY proposed a way out of this
mess
[[link removed]].
Retired professor James Perlstein described it in his testimony:
“(a) Redirect funds the City holds in reserve to bridge the
Municipal Labor Committee Stabilization Fund for three years, (b)
Create a stakeholders commission charged with finding a path to
control health care spending, with hospital pricing as a priority, and
(c) Develop a sustainable mechanism for funding City health
insurance.” PSC also suggested that New York City’s very
profitable non-profit hospitals contribute, since they don’t pay
taxes.

None of these steps have been taken, so far. Instead, city
administrators continue to push Medicare Advantage. “The city’s
taken a hardball position that it won’t negotiate new contracts
until the unions save them $600 million by moving forward with
Medicare Advantage plan,” said Rodberg in February. The city
promises to replenish the stabilization fund with the estimated $600
million it will save from the switch.

AFSCME DC 37 members have been working for 18 months without a
contract. Recently the city and the union inked a tentative agreement
with raises that don’t even keep up with inflation. Other city
unions object that this low bar will harm their negotiations, since
the city expects the first agreement settled by a major city union to
set a pattern which the other municipal unions will largely follow.

And while members will get to vote on the agreement, they won’t be
able to vote on the retiree health care concession their union agreed
to behind closed doors. It seems that as a condition for settling, the
dominant MLC unions agreed to impose what the retirees call “the
nuclear option,” deliberately misreading the city law they tried to
change, and making Medicare Advantage the only option for retirees.

Any retiree who wants to stay in traditional Medicare would have to
pay for all of their coverage, as if they had no union at all.

_[Jenny Brown [[link removed]] is an
assistant editor at Labor Notes.]_

 

What is Medicare Advantage?

In traditional Medicare, available when you turn 65, you present your
card, get care, and the government pays for it.

With Medicare Advantage, a for-profit insurance company gets money
from the government to cover you. But they get to take a fat
cut—Medicare Advantage is now the most lucrative sector of an
already-lucrative health insurance industry. And they get to say what
care you can get.

Medicare Advantage plans negotiated by employers and unions do provide
worse coverage than traditional Medicare. But they are generally
better than the individual Medicare Advantage plans that seniors may
sign up for themselves and which are advertised on late-night TV.

INDIVIDUAL VS. NEGOTIATED

Medicare Advantage plans that individuals buy on the private insurance
market may work out to have cheaper premiums than traditional Medicare
because they wrap in a drug benefit and may cap out-of-pocket
expenses. But they are notorious for denying expensive care, imposing
narrow networks of doctors and hospitals, and ripping off the
government.

On the other hand, union-negotiated Medicare Advantage plans are the
result of insurance companies having to negotiate with unions and
employers to sign up large groups of retirees, and that may restrain
the most egregious abuses. Still, some retirees in negotiated
plans report that
[[link removed]] they
were denied care at the most difficult time in their lives.

In both cases, the for-profit insurance companies that run the plans
have a strong incentive to deny care. Every dollar they don’t pay
for your care is a dollar earned by shareholders and CEOs, who often
take most of their compensation in stock. Stock prices are based on
how little care the company can pay for.

MEDIGAP VS. MEDICARE ADVANTAGE

Traditional Medicare (part A & B) costs $164.90 a month, and covers
hospital costs and 80 percent of non-hospital costs. But medical costs
are such that the 20 percent gap in coverage can quickly become
ruinous. So the government set up a regulated market of Medigap
supplements
[[link removed]].
Retirees can pay additional premiums to private insurance companies to
cover the final 20 percent, and cap out-of-pocket costs.

Medigap plans can cost as little as $75 a month, but can cost hundreds
more, depending on the plan, your age, gender, and whether you smoke.
Unlike Medicare Advantage, however, these Medigap plans are heavily
regulated.

It is this gap for which New York City union retirees over age 65 are
covered by the city’s Senior Care plan. The city also pays the
monthly premiums for traditional Medicare, so retirees get
premium-free coverage.

_Since 1979, Labor Notes [[link removed]] has been the voice
of union activists who want to put the movement back in the labor
movement. » _

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* Retirees
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* Medicare
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* Medicare Advantage
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* Medicare Advantage Plans
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* privatization
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* Healthcare
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* New York City
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* Mayor Eric Adams
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* Municipal Labor Committee
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* UFT
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* DC 37 AFSCME
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* For Profit Health Care
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* collective bargaining
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* health insurance
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* Aetna
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