In
May 2021, word of mouth got out that the City was planning to switch
all 250,000 City union retirees from Medicare into Medicare Advantage,
which is neither Medicare nor Advantage, but nothing more than a
dressed-up name for Managed Care run by private for-profit insurance
companies, with a whole bureaucratic structure of preapprovals and
denials. If we retirees wanted to keep our Medicare – the benefit that
has been in place since 1967 – we would have to pay for the supplemental
part of the insurance -- Senior Care-- out of our own pockets – a cost
of about $2400 per person a year, a not-insignificant sum for many of us
and an absolutely impossible sum for thousands of City retirees on
pensions of $10, $15, $20,000 a year – people in their 80s, 90s, over
100; people who had worked in low-wage City jobs for years, mostly women
and people of color.
A handful of us formed CROC – the Cross-union Retirees Organizing
Committee – and started spreading the word to other retirees, pressuring
our local politicians and contacting the media, organizing rallies at
City Hall, etc. Other groups were also reaching out: DC37 Retirees
Assn.; UFT’s retirees group Retiree Advocate; COMRO (Council of
Municipal Retiree Organizations), PNHP (Physicians For A National Health
Plan), PSC (Professional Staff Congress), etc.
The movement got a major boost when Marianne Pizzitola, a DC37 retiree,
pulled together the NYC Organization of Public Service Retirees (NYCOPSR)
and found a law group that would take our case. With that, we were off
to the races: Yes, you can fight City Hall – we did, and we won. In
February 2022, The NYS Supreme Court ruled that, under Administrative
Code 12-126, the City did not have the right to charge retirees for our
Senior Care. The City appealed – and lost.
What’s Happening Now?
That should have been the end of it, but of course it wasn’t. Two things:
Copays: As of January 2021, the City and Emblem
Insurance, which handles our Senior Care, started charging $15 copays
for every single encounter with medical professionals. Sounds like
nothing, but those copays sure add up when you’re getting PT or
chemotherapy 3-4 times a week – not uncommon for many seniors. And many
of us are seeing multiple doctors for multiple conditions. So NYCOPSR
has taken City Hall to court again and the court immediately issued a
temporary injunction against the copays, effective January 12 of this
year. For the moment, retirees are no longer liable for these copays.
We’ll see how this plays out in court.
Administrative Code 12-126: When it lost its appeal in
October 2022, the City tried a new tack: change the law. Right now,
12-126 provides the same coverage and protection for all active City
union members, retirees, and their dependents. The City wanted to add
some extenuating language to 12-126 that would create different
“classes” and levels of coverage. In other words, it would shatter equal
coverage for all and pit different groups against each other at the
negotiating table: retirees versus actives; teachers against school
kitchen workers, uniformed workers against admin staff, etc. The City –
and its helpmate, the Municipal Labor Committee – went all out to get
City Council to amend 12-126 with this new language. The retirees came
out in force to oppose the amendment – emails, phone calls, zoom meets,
rallies, culminating in an 11-hour hearing before the Civil Service and
Labor Committee. And by now, a lot of active workers were recognizing
the threat to their benefits as well. Divide and conquer didn’t work:
City Council decided to table 12-126 for now but can resurrect it at any
time. The language stands: equal coverage, cost-free, for all – active
workers, retirees, and dependents.
What’s at the Heart of All This?
Money. And the Health Insurance Stabilization Fund.
What is the Stabilization Fund? It was created under Bloomberg in 1984
to pay for active workers’ health insurance premiums when they exceed
the benchmark set in 12-126. It also puts money into the various City
unions’ welfare funds, used for other health-care expenses: podiatry,
dental, hearing, eye glasses, drug plans.
The problem is, the Stabilization Fund is going broke. Why? Because
since its inception it has been used as a slush fund, to pay for
non-health-care-related costs, primarily negotiated wage increases for
active workers. A few hundred million here, a billion there – pretty
soon, there’s nothing left.
So the City and the MLC, which basically means the UFT and DC37, the two
biggest unions, came up with a plan: dump all the retirees out of
Medicare/Senior Care and into Medicare Advantage, which is funded by a
subsidy from Medicare itself – an amount that is significantly less than
is currently being spent on retirees’ health care. Use the money saved
to replenish the Stabilization Fund. It’s a win-win for the City and the
unions. The only losers are the retirees, who have no voice in their
former unions. As for the actives, they won’t find out what’s in store
for them until it’s too late! The city is already looking for ways to
save money on their health care.
Now What?
We’ve won this battle but the war continues. Eric Adams is threatening
the “nuclear option,” eliminating all other health care plans except
Medicare Advantage. Anyone who refuses to accept the MA plan would no
longer be a “covered City retiree” — i.e., would lose all health care
coverage currently paid by the City, possibly including drug plan and
reimbursement for the Medicare premium as well as Senior Care medigap
insurance. This would add up to about $12,000 for a couple. It would be a
severe blow to those of us on “middling” pensions, but it would be
utterly devastating to the tens of thousands of City workers who had
worked in low-wage jobs or retired 15, 20, 25 years ago and are now
caught by the effects of inflation and fixed incomes.
So the fight is now even more dire, because people believe that we have
won when in fact we are now entering a much more dangerous phase of the
war. Our next step appears to be a fight to enshrine our right to
premium-free Senior Care coverage in the City code. We expect that this
will be a long and difficult fight.
Are There Better Solutions?
Yes! But what we need is time – and a Time-Out. And for that we turn to
the PSC – the Professional Staff Congress, which has come up with a
plan. It goes like this:
There is another City fund, the Retiree Health Benefit Trust. It was created in 2006 to pay exclusively for retiree health benefits, including:
• Pre-Medicare health insurance
• Medicare supplemental health insurance, Senior Care(for those age 65+)
• Medicare Part B & IRMAA reimbursements
At
the start of FY2023, the trust had a balance of $4.58B. Retiree benefit
costs are anticipated to be $3.6B in FY2023, leaving a surplus of close
to $1B.
The
PSC is proposing that for the next two to three years, the City not
reimburse the Trust by $500 million a year and instead deposit that
money into the Stabilization Fund. During this Time-Out period – and
this is crucial – a stakeholders committee that would include the City
should research and enact changes that will result in the long-term
containment of health-care costs. Some of these changes, all considered
briefly by the City and the MLC but never pursued, include:
•
Creating a self-insurance plan to cover the million City workers,
retirees, and their dependents, resulting in vastly reduced overhead
costs now currently incorporated into private for-profit insurers’
charges
• Having
the City negotiate directly with the private nonprofit hospitals for
limits on reimbursement rates, which are extortionate at present
• Consolidating
the 100+ union welfare funds into a single group, which would have
greater clout in negotiating group drug purchasing costs
• Auditing current insurance providers for potential fraud, duplication, and waste
Health-care
analysts, such as Prof. Barbara Caress, member of the Professional
Staff Congress (PSC) estimate that such changes could potentially result
in annual savings of $1B – at no cost or threat to the existing
coverage of City workers, retirees, and their dependents.
That is a true win-win.
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