Leonard Rodberg, PhD, March 5, 2023

Two years ago, the City and the leaders of its employee unions, in a move designed to

save the City money and deal with the rising cost of health care, put forward a plan that would have required City retirees on Medicare either to join a private Medicare Advance plan or pay $191.57 per month for their Medicare supplement (known as GHI Senior Care). Until then, this supplemental coverage, which fills the gap left by Medicare, the federal health insurance program for seniors which covers just 80% of the cost, had been paid for by the City. Today, following multiple lawsuits and two years of political debate, marches, and protests, the City and the union leaders are about to agree on a plan that will be much harsher and far more expensive for their retirees.

When the City and the Municipal Labor Committee (MLC), composed of the leaders of

the major City unions, issued their initial plan, they claimed, falsely, that the federal government would make up for what the City was not spending. They asserted – and continue to assert – that the private Medicare Advantage plan they are pushing would be as good as what retirees already have. That claim was false then, and it is even less true today. The federal subsidy has now fallen to just 2% — not the 20% claimed by the City and the MLC – and it is likely to fall even farther if current federal plans are implemented.

In 2021, then-candidate Eric Adams decried the City’s plan, declaring that it was a “bait and switch,” luring workers into the City work force with the promise of good benefits in return for middling wages, and then withdrawing those benefits when they were most needed. Today, as Mayor, he is implementing that switch on steroids. The MLC is about to vote on a City- approved plan which would not only require that City retirees, if they want to remain on Medicare, purchase and pay for their own supplemental plan, but it would also require that they waive all other City health benefits. No longer would the City reimburse them for their Medicare Part B (Medical) premiums, nor would they be eligible for City drug benefits. The cost to every retiree would be $5,000 to $6,000 each year. No wonder many retirees refer to this as the “nuclear option.” The majority of retirees would be unable to afford this, and thus, by design, would be forced into a Medicare Advantage plan provided by Aetna.

Retirees currently have 1st-class health care through Medicare, run by a federal agency, the Centers for Medicare and Medicaid Services, or CMS, whose mission is to provide access to health care for seniors and others. Medicare Advantage, by contrast, is private insurance paid for by CMS through a fixed per-member payment to the insurer. The mission of Aetna, a subsidiary of for-profit CVS, is to make money for their shareholders. Every dollar they spend on health care is a dollar not going to they shareholders – what economists call a “perverse incentive.”

Retirees currently have 1st-class health care through Medicare. The City and the MLC

are agreeing that retirees should be entitled only to 2nd-class, cut-rate medicine, Aetna will have available only three-quarters of the dollars to spend on health care now spent to cover retirees in the Medicare-plus-Senior Care plan. Former civil servants are being reduced to 2nd-class citizens compared to their opposite numbers in comparable private sector positions. Companies offering Medicare Advantage plans use a variety of measures to limit their spending on health care. These include ubiquitous copays which not only shift the cost to members but discourage them from seeking care. They limit the choice of physicians and hospitals, threatening access to doctors now taking care of ill retirees. And, unlike Medicare, they require prior authorizations by the insurer for any treatments and procedures likely to be expensive. The resulting delays and denials can be costly and even deadly to patients.

New York City, which claims to be a world leader in commerce and social policy, is

unwilling to learn from countries around the world, all of whom have found that you cannot turn over your health care system to private insurance companies and expect to achieve high quality, equitable, affordable health care. Authoritative comparisons of health care systems globally show ours to be the most expensive, least effective among all leading advanced countries, yet this City and its unions are moving from the effective approach of public Medicare to the demonstrably ineffective private insurance model. (In fact, the principal unions involved are on record, through resolutions passed by their governing bodies, in favor of a universal, publicly-funded health plans like the Medicare for All bills sponsored by Senator Sanders and Representative Jayapal, and the New York Health Act to be introduced shortly by State Health Committee Chairs Gustavo Rivera and Amy Paulin. The current leaders are choosing to ignore these resolutions.)

There are solutions that will not cost the City any money in the short run and could save

it large sums long-term. PSC-CUNY, the union representing CUNY faculty and senior staff, has proposed using excess reserve funds to provide the current retiree benefit while a stakeholder commission develops a plan to curtail health care spending in the future. Meanwhile, the City Council could pass legislation that would direct the Administration to continue to provide the current benefit, which would then no longer be subject to the vagaries of budgetary and political pressures. That is the fairest way to preserve the commitment the City makes to its employees when they join its work force.

Rodberg is professor emeritus of urban studies at Queens College/CUNY. He taught health policy and other topics until his retirement in 2017

Source: Len Rodberg