Retired NYC Workers Celebrate Medicare Switch Court Win

Update: On Friday, the day after the court decision, the Adams administration announced that it would appeal the judge’s ruling. New York City Corporation Counsel Sylvia Hinds-Radix released the following statement: “The City has filed a notice of appeal today and is seeking a stay on the court’s decision while that appeal is considered. As the City considers its options, the Medicare Advantage Plus Plan will not be implemented on April 1, 2022.”

A years-long fight over a planned cost-cutting change to retired city employees’ health coverage reached a critical juncture Thursday with a judge’s decision that allowsretirees to choose to keep their current plan.

The ruling from Judge Lyle Frank in Manhattan state Supreme Court allows a joint city-union effort to shift retired municipal workers’ health coverage from traditional Medicare to a privatized Medicare Advantage program by April 1 to proceed. But the city must now let current and future retirees opt out of the shift and maintain their current health care free of charge.

The ruling was a partial win for the city, which under former Mayor Bill de Blasio reached agreement with municipal unions to pursue the Medicare switch and other cost savings as existing workers sought raises.

But it’s also a victory for the group of retirees who sued to stop the switch, citing fears of higher costs, smaller networks, and greater administrative obstacles to accessing health care and preferred doctors under the new plan.

The city had planned to force retirees to enter the new privately administered 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 a supplemental program for treatments not covered by Medicare — free of charge.

Especially for retirees at the lower end of the city’s pension scale, which bottoms out around $15,000 a year, that cost threatened a significant financial burden.

Frank’s order said that as long as the retirees’ current health care program, known as GHI Senior Care, continues to exist as an option, it must be offered to retirees free of charge.

Steve Cohen, the lawyer for the NYC Organization of Public Service Retirees, the group that sued to block the switch, said that Frank’s ruling was “an unequivocal win” for retirees.

“They’re happy they’re going to be protected and they’re going to have their doctors. We’re grateful to the judge for seeing through all that the city tried to put forth,” he said.

But the ruling also creates a new complication for City Hall and municipal unions, by disrupting the expected boost to funding for union member health benefits from reinvestment of the plan’s savings.

Michael Mulgrew, president of the United Federation of Teachers, urged reworking the labor deal to ensure the promised reinvestment will still be realized.

“While the NYC Medicare Advantage Plus plan is sound, the program has suffered from serious implementation problems and poor legal arguments, particularly on the part of the city. Our retirees deserve better,” said Mulgrew in a statement.

He announced the UFT is withdrawing its support for the April 1 start date “and will urge the Municipal Labor Committee to suspend its efforts to begin the program until all the implementation and legal issues are resolved.”

And Henry Garrido, executive of District Council 37, the city’s largest municipal union, said the ruling would require his labor organization and others to renegotiate with the city. DC 37 members have been working under an expired contract since May and the union is seeking to set a new wage and benefit pattern for the entire city workforce. “But that’s probably not going to happen until we find a solution for the health contract,” he noted.

A spokesperson for City Hall said “We are reviewing the court’s decision and evaluating our options.”

The city Law Department did not immediately respond to a request for comment.

Obstacles to Care

For nearly a year since details of the new medical plan became public, retirees have voiced skepticism that it will provide benefits equal to what they currently receive, while saving taxpayers a promised $600 million annually.

Nearly all Medicare Advantage plans include fewer doctors than traditional Medicare does. The city has repeatedly claimed that the Alliance’s plan will enable retirees to see any doctor that accepts Medicare, which the vast majority of doctors do. But retirees cast doubt on this claim, giving testimony at hearings and submitting affidavits in state court saying that their doctors have told them that they will not be participating in the plan, or are unaware of it.

The new plan will also make it more difficult for retirees to access many treatments.

Under Medicare Advantage, health care providers will have to get approval in advance from insurance companies before conducting dozens of procedures or treatments including some doctor’s office visits, mental health care treatments, home health care services, and tests such as x-rays and bloodwork, legal documents show.

Under their current Medicare, this kind of pre-approval is only required for a very limited number of treatments, such as transplants and physician-administered drugs. Most treatments do not require any pre-approval at all.

“We are so grateful that we will not have the $191 penalty every month, which we cannot afford, and we are so grateful that we will not be required to have prior authorizations for many, many, many common medical treatments ‚” said Sarah Shapiro, a retired member of the United Federation of Teachers union.

Now the leaders of the retiree backlash are preparing to make sure retirees know that they can opt to keep their current Medicare coverage for free.

“We’re trying to get the message out to retirees that they still have time to opt out, if they wish to,” Cohen said.

‘Drop This’

But the retirees’ victory may be a temporary one. Under Frank’s order, the city has the right to drop the GHI Senior Care plan and force all retirees onto the fully private Medicare Advantage program in the future.

Cohen said that any moves to eliminate Senior Care would have to be the subject of negotiation between the city and the municipal unions. “Is that in the best interest of the active [employees] or retirees? Let’s see if everybody will do the right thing,” he said. The ruling is also subject to appeal.