Mayor issues retiree health care ultimatum, seeking to end standoff

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Mayor Eric Adams issues an ultimatum to employee unions and the city council, aimed at ending a standoff over retiree health insurance that could cost the city budget billions.

The Board must either authorize its administration to transition retired city employees to a private Medicare Advantage plan, with an opt-out option for a price, or the Adams administration will unilaterally discontinue all health insurance plans that currently cover city ​​retirees and replace them with a Medicare Advantage plan, according to a letter sent Friday by Office of Labor Relations Commissioner Renee Campion.

Administration says it will end current insurance plans unless City Council immediately comes up with an action plan this week to pass legislation allowing the city to charge retired city employees for insurance which they currently get for free.

For more than a year, many retirees have fiercely resisted the city’s attempt to switch their health insurance to Medicare Advantage, a program in which private companies work with the federal government to offer plans similar to Medicare, the federal government’s health insurance program for Americans who are 65 or older, or disabled.

Retirees worry that a Medicare Advantage plan will cover fewer services and have a smaller network than the plan most of them are currently enrolled in, which is traditional Medicare plus an additional plan called Senior. Care. A New York Times report earlier this month found that every year tens of thousands of people enrolled in Medicare Advantage plans nationwide are denied necessary medical care that likely would have been covered if they were enrolled in traditional Medicare.

The city had planned to save about $600 million a year, largely by tapping into federal grants for Medicare Advantage — all under a cost-cutting program negotiated between unions and the former mayor. Bill de Blasio.

If the administration fails to realize these savings, current workers could pay the price. In recent discussions with union leaders, the Adams administration had previously warned that if Medicare Advantage did not move forward, it would push to impose insurance premiums on active city employees, Michael Mulgrew said, president of the United Federation of Teachers and vice-president. of the Municipal Labor Committee, a coalition of municipal unions.

A spokesperson for Adams confirmed that the administration is considering actions that would affect health insurance for active employees.

“Unless legislation mutually supported by the city and the city labor committee is passed, the city will have to make the necessary savings through other measures that will impact both active employees and retirees,” Adams spokesman Jonah Allon wrote in a statement.

In this scenario, active employee dues would be about $1,500 a year, according to the United Federation of Teachers, a considerable sum for city workers at the bottom of the wage scale, which reaches about $30,000 a year. year for full-time employees.

Allon noted that the city currently faces “significant fiscal uncertainty,” with potential shortfalls of billions of dollars in the coming years. “The Medicare Advantage plan is part of a comprehensive solution to this challenge,” he said.

A spokesperson for City Council Speaker Adrienne Adams said the council is currently considering the ultimatum.

“The Board is discussing this internally and understands the urgency and need to protect health care for our current municipal employees and retirees. There are many considerations surrounding this issue, and we will update you on our plans as they become available,” the spokesperson said.

Mulgrew said any deal that would require active employees to pay insurance premiums is irrelevant to him, and the best option is to preserve premium-free plans for retirees and active employees by moving retirees to Medicare. Advantage.

“I will not oppose my retirees to my employees in service,” he said.

According to the Public Service Retirees Organization, a group that sued the city to stop the Medicare Advantage change, the Adams administration and unions are already doing that.

“Nobody is against health savings, but we don’t do it in the dark and on the backs of the most vulnerable people,” said Steve Cohen, lawyer for the Organization of Public Service Pensioners.

Where is the money?

When it unveiled the planned change last year, the city offered retirees a choice: They could switch to a premium-free Medicare Advantage plan, or they could pay $191 a month to keep their coverage under Senior Care. But in March, Manhattan Supreme Court Justice Lyle Frank ruled that forcing retirees to pay for elder care would violate the city’s charter, putting the planned change on ice.

In September, the Adams administration and the unions asked the Council to change the section of the charter on which Judge Frank had based his decision, to allow the city to make the change in the budget cut. But earlier this month, the Daily News reported that the Council was “lukewarm” on implementing the change. The letter from the Labor Relations Office, dated October 28 and addressed to MLC President Harry Nespoli, says no legislation has yet been introduced to bring about the change.

The letter also said that unless there is a “quick timeframe” for changing the law by the end of this week, the Adams administration will unilaterally impose a Medicare Advantage plan on retirees and eliminate all others. plans currently available, including Senior Care.

The aggressive move would likely be legal, due to a 2018 agreement between unions and the de Blasio administration that pledged to save $600 million a year in health care costs, starting in 2021. The agreement contained several potential ways to achieve savings, including switching retirees to Medicare Advantage.

Under the 2018 agreement, if the unions and the City fail to achieve these savings, the City is authorized to ask an arbitrator to impose a solution that saves the agreed amount. The arbitrator could include ordering a switch to Medicare Advantage and eliminating all other health care plans.

Marianne Pizzitola, president of the New York Public Service Retirees Organization, said the city should convene a commission to look at other ways to save money, with representatives from the city, unions and retirees.

Pizzitola said his group has already identified ways to save the city at least $350 million a year in health care costs, such as verifying membership in insurance plans. A 2014 audit saved the city more than $100 million by ending coverage for people who were incorrectly enrolled in city-funded insurance.

“There’s money to be found if you do it responsibly, and what the MLC and individual unions are doing now is absolutely irresponsible,” said Cohen, the retiree group’s attorney.

A reluctant advice

Mulgrew said he and other union leaders held “numerous” meetings with council members to push for legal change, but declined to name members who were considering introducing legislation to change the charter.

Pizzitola said she had heard that President Adams was considering introducing the bill herself. Adams’ office declined to comment.

Pizzitola said several council members, whom she declined to name, said union leaders told them that if they did not support the charter change, unions would not support them in their re-election campaigns. next year. A United Federation of Teachers spokesperson denied the claim.

Mulgrew said he hopes to convince the Council to pass legislation by the end of November. The letter from the Labor Relations Board said the Adams administration originally hoped to pass legislation by Nov. 23, but with no bills introduced on Friday, it is now “virtually impossible.” “.

If the switch to Medicare Advantage proceeds, the city and unions will need to find an insurance company to administer the plan. The contract was originally awarded to the Retiree Health Alliance, a partnership between insurance companies Elevance Health and Empire BlueCross BlueShield, but the Alliance pulled out in July, citing uncertainty caused by the ongoing lawsuit against the change.

Mulgrew said the unions and the city have not selected a company to administer a new Medicare Advantage plan, but noted they are currently in talks with Aetna, which had the second bid for the original contract.

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