Interview in The Chief

Medicare Advantage Plan.

UFT Leader Tries To Dispel Retiree Fears About Medicare Shift. Story from The Chief by Richard Steier. May 7

United Federation of Teachers President Michael Mulgrew said May 5 that he has been besieged by nervous union retirees concerned about “horror stories” regarding Medicare Advantage plans that are vastly different from the one he and other city labor leaders are pursuing in tandem with the city Office of Labor Relations.

“Everyone was looking at Medicare Managed Risk and Medicare Advantage individual plans,” he said in a phone interview. “Everybody was quoting factual things about the Medicare Individual Plan. But that’s not what we’re interested in.”

And, he continued, “We’re not interested in anybody’s off-the-shelf group plan.”

Under the group plan being sought by the Municipal Labor Committee, the health-care-negotiating arm of city-employee unions, a key condition will be that “everybody can go to any doctor they currently have, even if they’re not in-network,” Mr. Mulgrew said. “We’re not giving anything away. The goal is to protect all of the benefits, if not increase them, and keep them premium-free.”

In addition to his obligation to UFT retirees to get the best deal possible in the switch to Medicare Advantage from the current Senior-Care plan, he said he has a personal stake: both he and his wife have their mothers enrolled under the union’s plan.

The changes involve MediGap, the 20-percent of health-care costs not covered by the basic Medicare plan, which is “what we negotiate all the time,” Mr. Mulgrew said of the talks with the city. 

A steady stream of annual double-digit increases in health-care costs has prompted OLR to press the MLC since Mayor de Blasio took office in 2014 to find billions in health-care savings, which it has succeeded in doing. But each dollar spent to cover those rising costs, the UFT leader noted, was one less dollar available for wage increases.

“The last thing I want is for health care to be at the center of every collective-bargaining negotiation,” Mr. Mulgrew said. “This is our way of not sitting back” while the rapid growth in health costs cuts into the pie available for pay raises and other benefits being improved.

Speaking of the portion of health-care costs not paid for by basic Medicare, he said, “If we go to a Medicare Advantage group plan, now the 20 percent is federally reimbursable. It’s not easy to do, but it’s the smart thing to do.”

A day earlier, he had hosted a Town Hall meeting largely via conference call that wound up reaching 8,500 anxious, sometimes-angry UFT retirees. Not only had he been able to calm the fears of many of them, Mr. Mulgrew said, but the dialogue with the retirees “was great because I got some ideas from it” that will be explored in discussions with city negotiators.

Two weeks earlier, Labor Commissioner Renee Campion and Deputy Commissioner, Labor Strategies Claire Levitt had also spoken of the difficulty of cutting through the misinformation about what the two sides were discussing in trying to find a private insurer to take over administration of the retiree health plans. They expect that move to bring management efficiencies that would allow, Ms. Campion said, the city and unions to “increase quality and benefits while reducing costs to the city.”

She had noted that one reason these aims could be accomplished was that the city wanted significant savings but was “not looking to save as much money as possible” by reducing benefits or boosting co-pays. 

Ms. Levitt, speaking about the same opportunity Mr. Mulgrew subsequently mentioned regarding what was “federally reimbursable,” had noted that “the higher the plan is [in terms of service delivery], the more [providers] get from Medicare.”

Even after they laid out their expectations, uncertainties remained among retirees, reflected in both the questions Mr. Mulgrew faced from UFT retirees and numerous letters written to this newspaper over the past two months. Part of the reason is that the city and the MLC have still not chosen a provider, making it impossible to address questions about particular benefits because they differ among those bidding for the contract; another is what some retirees have claimed is a reluctance to include them in the discussions.

Stu Eber, the president of the Council of Municipal Retiree Organizations, said a number of unions and their leaders in recent weeks have tried to offer a better sense of where the discussions are going and what the change is likely to mean. He noted that a list of 22 questions he had submitted about the shift had apparently been circulated among members of the MLC’s technical and steering committees. 

(Mr. Mulgrew, speaking a few hours earlier, acknowledged that union leaders themselves “still have questions. This is highly technical crap, but we realize every little detail matters.”)

“Our initial point was they should be including retirees in the process,” said Mr. Eber, a former president of the Managerial Employees Association. As more information has emerged, he added, “We do understand this is not the worst of all possible Medicare Advantage plans. We still need information about gate-keepers,” referring to the need for approvals by the eventual provider before both tests and procedures can be done in cases where that isn’t required under current Medicare coverage.

Ms. Levitt acknowledged last month that pre-authorization was likely to be required, regardless of which of the finalists got the contract, for matters including “hospital inpatient, behavioral-health inpatient, ambulance [transport] and step therapy for certain high-cost drugs.” But while traditional Medicare didn’t require prior approval for some of those, she noted, “Medicare regulations state that ‘Medicare covers ambulance services only if they are furnished to a beneficiary whose medical condition is such that use of any other means of transportation is contraindicated.'”

One union official, speaking conditioned on anonymity, said whichever finalist was chosen, there would not be a gate-keeper regarding referrals to specialists.

Mr. Eber also pointed out that two leading Manhattan hospitals, Sloan-Kettering and the Hospital for Special Surgery, don’t currently accept Medicare Advantage, and wanted to know if that would change under the city’s version of it. The union official said both those hospitals would be participating in the program.

Mr. Eber said that, his remaining reservations notwithstanding, “I think we’ve gotten a better explanation as to how they’re going to save the money. That’s encouraging: that they’re listening.”

He was also pleased when told that Mr. Mulgrew had said that the savings from the shift would be placed in the MLC Stabilization Fund, as well as helping to cover optical and dental benefits and hearing aids that are currently paid for from union welfare funds.

But Mr. Eber said that during a meeting of the MEA’s retiree chapter earlier that day, one of the concerns was the confusion that might result during the transition to the Medicare Advantage program.

“It’s going to be a problem to explain to thousands of retirees, ‘It’s the same Medicare, it’s just a different card,'” he said. He cited one member who after retiring from city service had gone to work for the Greater New York Hospital Association and was computer- and Medicare-savvy, but still had a problem with Medicare Advantage and “it took him three months to navigate the system.”

The problem could be compounded, Mr. Eber said, for those retirees who are not fully versed in working on computers, or in cases where programs used are difficult to understand. Mentioning one provider that is believed to be a finalist for the contract, he said, “What are they gonna do when the problem is not with Aetna but the computer program they wrote?”

Mr. Mulgrew had spoken of overcoming retiree fears that were rooted in partial information, remarking, “These horror stories about Medicare Advantage individual plans, they’re true, but they’re very narrow network plans,” as opposed to the far-larger group plan the MLC will be signing on for.

Mr. Eber said, “We thank the MLC for being responsive [recently]. Individual presidents are talking to their retirees. Progress is being made, but we’d like to see more of that.”

Mr. Mulgrew, asked whether retirees would be apprised of the terms of whatever plan was tentatively accepted before the MLC formally approved it, said, “I think we’ll be able to get that done. There’s no obligation at that point to do anything [to finalize], regardless of what the city says.”

He too spoke of forward steps being taken, and in a more-positive light than Mr. Eber.

“We’ve made a lot of progress getting to a plan that we can all be proud of,” the UFT president said.