Why Public Employers Are Forcing Retirees Into Medicare Advantage
For NYC Retirees Are In the Fight of Their Life to Protect Their Benefits.
The law calls it "auto-enrollment for seamless transition" into privatized Medicare.
Under the Medicare Modernization Act of 2003, a change in the law was made quietly with no public or open comment period that permits employers and unions, to "auto-enroll" retirees into Medicare Advantage. Many of these retirees were lured into employment, especially public employees, with the promise of a pension and healthcare in retirement if they worked their lifetime for lower wages and benefits. This benefit was a form of deferred compensation if you will. They upheld their part of the deal, and their former employer and unions should do the same. Sadly, some decades after they retired and are currently over 65 years old retirees, some disabled, some 9/11 responders or survivors dealing with a debilitating illness, they are being forced off Original Medicare and into a privatized alternative known as Medicare Advantage that is not serving all their needs.
Make no mistake, in the words of national whistleblower Wendell Potter, Medicare Advantage is not Medicare and not an advantage.
Why are employers and unions doing this in NYC and around the USA? Great question! We are glad you asked!
First, for those who don't know how insurance changes when you are Medicare eligible, let's break that down!
Who does Medicare cover? People over 65 years old and those on disability - your most vulnerable populations.
Original Medicare - Is called "fee for service" because the Centers for Medicare and Medicaid (CMS) pays providers for each service performed. There are no networks of providers as almost 99% of providers in America accept Medicare. The few that don't are pediatricians and psychiatrists. The provider makes the care determination and there are rare prior authorizations. So as you can see, you can bascially see any doctor or hospital you want to, even specialists and they only get paid for the services they render and your doctors make your treatment decisions.
Medicare Advantage - Private for-profit insurers are paid a capitated rate, based on region to administer Medicare so CMS doesn't have to privatizing the federal public health benefit. In NYC, that rate is about $1056 per month whether you receive care or not. The insurer has to cover everything Medicare does but how they do it is different. They have a limited network of providers, which changes sometimes with little notice. They have prior authorizations which allows them to determine if the care your doctor is ordering is medically necessary to them to cover. Sometimes that is done by a human and most times Artificial Intelligence. These companies are known to wrongly delay and deny care as has been cited many times by the Health and Human Services Office of the Inspector General. And in order to increase their profits companies have been known to "upcode" and overcharge the federal government. Aetna, the CVS owned company the City of NY is trying to force retirees into, was asked to return a settlement amount of $25.5 million for just that.
Original Medicare pays the first 80% of medical bills and a supplement or 'Medigap' plan pays the 20% of the bill Medicare does not. Some employers reimburse the retiree the Medicare B premium in part or in full. Others may also provide the supplement which pays the last 20% that Medicare doesn't. These supplements are usually inexpensive. For NYC retirees, the cost to the City of NY is less than $400 per month. The going premium for active workers is about$1000/individual $2500/family. So as you can see, the costs for Medicare eligible retirees, your most vulnerable, is very low.
So why would anyone remove your most vulnerable population from Original Medicare? Money.
Private insurers usually offer Medicare Advantage plans for free or low cost to employers. This is enticing for the manager seeking to reduce costs. They are sold as being better than Medicare and "offering benefits Medicare doesn't" like a fitbit or cab rides or a debit card known as 'perks.' In reality, these plans are not for everyone which is why when they were founded it was meant to be a choice - not a mandate. These perks come at the expense of direct access to any Medical provider and access to care. For healthier retirees, it is not an issue, but if you need lifesaving care and your provider is not in the network or their services require prior authorization, that perk will do nothing for you. Insurance is meant for health coverage, not perks.
There are many more down sides of Medicare Advantage plans, and I will start to break those down in the following series of articles sharing personal stories to show why these plans are not for everyone and why retirees should not be auto enrolled into them. It is important to know that hundreds of thousands of retirees are not "choosing" Medicare Advantage, their former employers are auto enrolling them into them because of this little known rule that allows CMS to grant waivers to employers to move their retirees out of Original Medicare and into Medicare Advantage if they are in an employer group waiver plan (EGWP). In essence, diminishing their access to healthcare. They are marketed as a savings to the employer, but at a cost to the health and even the life of the retiree who their entire life worked knowing when eligible they would be in original Medicare because they paid a Medicare tax their entire life and their former employer said that would be so. This is happening more frequently to public employees but in the private sector as well.
Promises made should be promises kept. The NYC Organization of Public Service Retirees has filed litigation against the City of NY to preserve their Medicare benefits and have been fighting in court since 2021. They have won in court many times, but the City keeps appealing its losses. More to come!
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