Westchester Hospital Network To Shift Thousands of Retirees to Private Health Insurance

Over 2,000 retired employees of the Westchester Medical Center Health Network and many of their spouses will have their health insurance changed from traditional Medicare to a private insurance plan on January 1, New York Focus has learned.

Retirees have until Monday to decide whether they will opt out—but many say they haven't been given basic information about the new plan, which will be run by the for-profit insurer UnitedHealthcare as part of a cost-cutting measure by the hospital system, including how many health providers its network would include and which benefits it would offer.

“It’s under a shroud of secrecy,” said Edward Farrell, the executive director of the Retired Public Employees Association, a group that advocates for retired New York public employees. “Your providers may or may not be in this system. It’s a scary thing.”

The shift closely parallels a planned switch in New York City of retired city workers from their current insurance to a privately-run Medicare Advantage plan, as first reported by New York Focus in April. That plan has been on hold since late October, when it was temporarily blocked by a judge, whose ruling cited a lack of clarity about which providers would be included.

But even less is known about the planned switch in Westchester. Unlike in New York City, where the switch has become a subject of considerable debate, the switch in Westchester has received almost no scrutiny. Asked if County Executive George Latimer had a position on the switch, a spokesperson responded that “the medical center is private not part of the county.”

The hospital system is in fact part of a public authority, the Westchester County Health Care Corporation, which currently provides retirees free health insurance as part of their retirement benefits. The hospital reimburses the cost of Medicare premiums for outpatient care and also provides a supplemental “Medigap” plan that covers the cost of services not included in traditional Medicare.

Retirees can remain in traditional Medicare if they opt out of the new plan, but they’ll no longer receive any health benefits from the hospital, leaving them on the hook for thousands of dollars a year in Medicare costs. (In New York City’s planned switch, city retirees would be allowed to pay to remain in their current plan; no similar option is available to the Westchester retirees.)

The hospital maintains that the plan would be an improvement for retirees.

“This new plan is better for our WMCHealth retirees as it offers comprehensive medical benefits equal to or better than existing coverages (zero-dollar deductibles, lower co-pays, and new, out-of-pocket protections) and offers the same prescription drug co-pays. This new plan also offers extras such as vision coverage, at-home nursing care, and gym memberships,” a spokesperson wrote in an email.

Asked to review the spokesperson’s statement, David Meyers, a professor of public health at Brown University, wrote in an email that those commitments were standard for Medicare Advantage plans—and that the statement didn’t address key questions.

“Most of their statement highlights features that most MA plans have… without knowing more details about how the network might change, and what the cost sharing requirements might look like, it is difficult to assess what impact this shift may have on beneficiaries,” he wrote. 

Cary Wagner, a social worker who worked at Westchester Medical Center and now lives in Valley Stream, Long Island, said that he is “leaning towards opting out” because of a “lack of understanding what you’re signing up for.”

Westchester Medical Center mailed all retirees a booklet detailing the new plan in the weeks after announcing the switch—but it contained several errors, including incorrect information about the size of deductibles and the percentage of prescription drug costs covered by the new plan.

An employee of Westchester Medical Center said a corrected booklet had been mailed to retirees during the week of November 22, and that a digital copy was being prepared. But neither Wagner nor Ed Goldberg, a retired registered nurse who lives in Montrose, had received the booklet as of Tuesday, they told New York Focus.

The hospital declined to provide New York Focus with a digital copy or any other materials on the plan. A spokesperson said that retirees shouldn’t worry about losing access to their providers, since “the plan is accepted wherever Medicare is accepted, which is widespread.”

Experts raised their eyebrows at that claim. “Setting defined networks is a crucial tool that MA plans use in order to control costs,” Meyers said. “While UnitedHealthcare tends to have larger national networks, it would be surprising if every provider that accepts Medicare is included in-network.”

During the conference calls, Wagner said, multiple retirees said that their doctors had informed them that they would not be participating in the Medicare Advantage plan. A 2017 Kaiser Family Foundation study found that the average Medicare Advantage plan includes 46% of the physicians in the county where the plan is based. 

Retirees are also concerned that the new plan will achieve savings by requiring providers to obtain approvals of certain procedures from the insurer in advance. Such “prior authorizations” are a cost-saving tactic employed by more than half of Medicare Advantage plans for services including inpatient stays, ambulance rides, and mental health services.

On one of the conference calls, a hospital representative said that UnitedHealthcare would reserve the right to require prior authorization in some cases, Wagner recalled.

The hospital spokesperson declined to provide New York Focus with a list of what procedures would require prior authorization under the new plan. UnitedHealthcare referred New York Focus’ request for comment to Westchester Medical Center.

Similar efforts have been attempted elsewhere in New York State. In 2018, Rockland County Executive Ed Day put forward a plan to switch roughly 2,600 retired county employees and their spouses from New York State’s Medicare plan to a Medicare Advantage plan managed by Aetna. The plan was shelved amid fierce opposition from the county legislature and Rockland retirees.

Beyond New York, moving retirees to Medicare Advantage to save money is a known phenomenon nationwide. “Employers have been gravitating towards Medicare Advantage plans to save money on their retiree health obligations,” Tricia Neuman, executive director of the Kaiser Family Foundation’s Program on Medicare Policy, told New York Focus. “New York is not alone.”

Westchester Medical Center Health Network’s 2021 budget included $21.6 million in retiree health benefits, which it noted is “generally no longer provided by most employers.”

The hospital system did not provide an estimate of how much it would save by the switch. Cutting costs may seem particularly attractive to a hospital that has recently been in financial straits: the Westchester County Health Care Corporation was more than $355 million in debt at the fiscal year ending in 2020, and a $300 million bond issue in August 2020 was given the second-lowest rating at which investment is still recommended by Moody’s.

Farrell said that the switch would amount to a false promise. “Once you’re retired, for the employer to come back and change the benefits is just not good policy,” he said. “For people who have committed a career, there’s an expectation.”