LaborPress

On January 9, 2023 the New York City council held a hearing to discuss the proposed changes to the Administrative Code 12-126 that will impact on almost three-hundred thousand retirees, Intro 0874. At this hearing, city retirees expressed their disagreement with New York City switching retirees from Senior Care to Medicare Advantage. NYC is claiming changeover is need for healthcare savings. Over 200, mostly retirees, signed up to testify in person or virtual. The city’s move to switch retirees to a privatized Medicare Advantage plan is facing fierce opposition and could become a national embarrassment for New York City. While over 100 seniors attended the hearing, thousands demonstrated outside the New York City Council complex.

The City Council is considering elimination of Administrative Code 12-126. This would allow those retirees that could afford the $191 a month charge, to opt out of Medicare Advantage and keep their current Senior Care insurance. Throughout the years, healthcare has been included in union negotiations for both active and retired New York City employees. City retirees that enrolled in Medicare receive EmblemHealth Senior Care as a supplemental coverage. With the City’s Joint Health Insurance Premium Stabilization Fund becoming depleted, NYC and municipal unions looked at possibilities to reduce healthcare costs. The planned switch from retirees’ current Medicare plans to privatized Medicare Advantage was agreed in 2018 by the Municipal Labor Committee in negotiations with former Mayor Bill de Blasio in an effort reduce healthcare costs. These plans offer lower premiums by controlling approval for operations, having limited doctor networks, and charging fees. The city estimated a savings of $600 million dollars by moving retirees to Medical Advantage and requiring seniors to pay $191 a person to continue on Senior Care. It’s certainly easier to impose healthcare changes and costs on retirees that do not vote for labor leadership than active members.

The following are excerpts of testimony at a hearing of the New York City Council Committee on Civil Service and Labor on January 9, 2023, Intro 0874-2023 – health insurance coverage for New York City employees, retirees, and dependents

Testimony of Dr. James Davis, President Professional Staff Congress/CUNY: “As President of the Professional Staff Congress, a 30,000 member union, I am here to ask you to reject the proposed change to the City Administrative Code 12-126. There are practical concerns that my colleague and I will raise, but most importantly, we urge you to seek alternatives. It is true that healthcare costs are skyrocketing, and also true that the Municipal Labor Committee (MLC) cannot maintain its Stabilization Fund commitments under the status quo. But it is not true that Medicare Advantage is the only path to achieving savings for the City, or that premiums must be charged to retirees who remain enrolled in Senior Care or for active employee health insurance. The PSC has opposed the change to the Administrative Code because it would open the door to lesser plans being negotiated for subgroups of employees. Retiree access to traditional Medicare and Senior Care should continue and remain premium-free. The City can of course implement a Medicare Advantage program, but healthcare savings should be found elsewhere. We are told we are in a box, and now the Council is in that box too. But you do not have to accept those terms if you have the political will to do otherwise. What kind of choice are we preserving if a retiree is charged $200/month to keep Senior Care? For low-income retirees and their dependents that is not a real choice. You have heard that if you fail to change the Administrative Code, retirees will be forced into Medicare Advantage; but many will be forced to enroll if the Administrative Code is changed. That is not legislating boldly, it is accepting a tiered system that regulates access by income and race. Another solution must be found. It is not impossible. It could be accomplished in three phases. First, the City should provide short-term relief by allocating $500 million per year less to the Retiree Health Benefits Trust and contributing the equivalent amount to the Stabilization Fund. The RHBT has sufficient reserves to do this for 2-3 years. In that time, a stakeholders’ commission should be charged with identifying a path to control healthcare spending. The commission should focus on hospital pricing, the main culprit. A sustainable method of funding City health insurance should emerge from this process, replacing the Stabilization Fund and reaffirming the MLC’s right to bargain with the City over public employee health insurance. The City has sufficient resources for this approach. Nothing is solved by forcing the MLC unions to deliver $600 million unless the Stabilization Fund is restructured. Tying future wage increases to this $600 million “savings” is unfair and fiscally unnecessary. We talk about tearing off the band-aid to deal with healthcare savings, but the proposed change just applies a different bandaid while inflicting new wounds. We urge you to take a bolder and more thoughtful approach than a change to the Administrative Code.”

Testimony of Stuart Eber, Chairperson of the Council of Municipal Retiree Organizations (COMRO) and President Emeritus of the NYC Managerial Employees Association: “The Administration has created a false dichotomy. They are forcing you to choose between preserving Medicare as our primary medical coverage with the City paying for our supplemental coverage or imposing premiums on all members of the City health plan. The attempt to rush you to vote on the amendment to Administrative Code 12-126 is just one of their tactics to force us into a Medicare Advantage plan. Your committee has received thousands of emails from concerned retirees documenting the deficiencies in the for-profit private Medicare Advantage plans. In particular, the required pre-authorizations for dozens of procedures and tests has proven to prevent patients from receiving necessary care, the refusal of many doctors and hospitals to accept Medicare Advantage plans, and the billions of dollars the federal government is trying to recoup from fraudulent claims demonstrates why most people do not want to lose Medicare and be forced onto Medicare Advantage.”

Leonard Rodberg, PhD: “When the City and the MLC introduced their plan, 18 months ago, to move all their retirees to a Medicare Advantage plan, they claimed that the federal government would make up for the $600 million cut in City spending on our healthcare. That statement was false. The City is currently contributing 20% of our healthcare costs; the federal subsidy to Medicare Advantage for the past few years has been just 4%, and this year it is reported to be just two percent (see Figure 1) Further, in Medicare, federal money goes directly to doctors and hospitals. In Medicare Advantage, private insurers siphon off an average of 14% to pay for everything from the cost of staff to review requests from physicians to authorize tests and treatments for their patients, to profits for stockholders, to salaries for overpaid CEOs like Mark Bertolini of Aetna – the City’s chosen insurer – of $27 million last year. The result is that Medicare Advantage is inferior, cut rate medicine, with 24% less money available to care for patients compared to real, traditional Medicare. This cut of nearly a billion dollars will have real consequences: Less access to care. More illness. People will die so the City can save money, and insurers like Aetna can enjoy growing profits and paycheck.”

Wilson Guzman, AARP New York Associate State Director: “Retired city workers are the very people who built this city and made it great. They deserve what they were promised, and above all, they deserve the assurance of good health care in their later years. The City’s Medicare Advantage scheme could instead saddle retirees with higher costs, smaller networks, and greater administrative obstacles to accessing health care and preferred doctors. A promise made should be a promise kept. These retirees were promised solid health plans at no cost and that is what they should be guaranteed. No retiree should be forced to pay more to get the same coverage or to lose coverage they currently have. But this is even more than about what’s fair and what’s right. This is also about placing retirees under undue financial stress for the purposes of saving the city some money. Cost savings should not be brought to bear on the backs of retirees. For that, the city should look elsewhere. Last year we released AARP New York’s blueprint for action, titled “What New Yorkers 50+ Deserve,” which is filled with recommendations to help city officials address vital issues facing older New York City residents. This blueprint lays out the financial hardships faced by our older residents. These hardships already impact housing and hunger; let’s not add health care to the mix by making it more expensive for retirees to see their doctor. A promise made should be a promise kept.”

Anne Friedman, Professor Emerita, BMCC: “Now that your committee has decided to put forth a recommendation for amending Administrative Code 126-26, I implore you to think carefully about changing a law that for decades and one that has served well both in-service and retiree city workers. This short-term fix opens the door not to choice of health plans, but to tiering of them – reinforcing the already economic, racial, and gendered divides which already exist in our city. The more highly paid workers, who can afford to pay a premium to keep their traditional Medicare and Senior Care coverage will do so and those at the lower rungs will be provided with a false choice because they can’t afford these costs.”

Kyle Darren Simmons, President, NYC Laborers Local 924, DC 37: “This administrative code was put in place for a very good reason, to keep everyone honest on both sides of the table so those that made certain wage sacrifices in the past to have future retirement benefits which include real healthcare. If you make changes in this code, you will remove the protection for the retired employees of the City of New York because they don’t have a seat at the table. Please don’t change the code because it will not solve the healthcare crisis, it will just put the retirees that already have very little economic resources into healthcare insecurity.”

This excerpted opinion article was written by Former PSC President Barbara Bowen and PSC Member Barbara Caress and appeared in the NY Daily News January 9, 2023: “For more than half a century, New York City has kept a covenant with its workers: your wages will be modest – lower than those of your counterparts in the suburbs or the private sector – but as a full-time employee you will be entitled to health care coverage without paying premiums. If you retire with enough years of service, you will be guaranteed Medicare coverage, with the city picking up the 20% Medicare does not pay. Through the years, the city has added copays and deductibles, whittling away the value of the coverage. But the basic agreement has lasted through major recessions and the city’s catastrophic budget losses after 9/11. Until now. Today, the City Council will hold a hearing on a proposal that would break the compact. The proposal to amend the city’s administrative code would legalize degradation of retiree health benefits and permit negotiations about active employee benefits that may diminish coverage.”

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