Medicare Advantage To Offer Improved Benefits To Retirees as of Jan. 1

Unions Strongly Ratify Shift To Private Provider As Money-Saver. Plan design comparison chart. Story from The Chief by Richard Steier. July 19.

The Municipal Labor Committee July 14 overwhelmingly approved a transition from the city’s Medicare program for retired employees and their beneficiaries to a privately managed plan that is expected to upgrade benefits in key areas while saving the city $500 million annually in health-care costs.

That savings will be used to fortify the Health Stabilization Fund, which offers supplemental help to employee welfare funds in areas such as dental and prescription-drug benefits but has reached a point of near-depletion.

The new plan, known as the NYC Medicare Advantage Plus Program, was reached after months of negotiations between the MLC—which bargains for city unions on health-benefit issues—and the de Blasio administration that also required them to choose between two prominent health-care providers that sought to run it. Ultimately, acting on the recommendation of mediator Martin Scheinman, they opted to go with the proposal from an alliance of Emblem Health and Empire Blue Cross/Blue Shield over one offered by Aetna. It will take over Medicare services as of Jan. 1, 2022.

“I really think it’s a good program: for the city, for the retirees, and for future retirees,” MLC Chairman Harry Nespoli said in a phone interview an hour after the program was ratified by what he estimated as 90 percent of the MLC’s membership committee, led by the city’s two-largest unions, the United Federation of Teachers and District Council 37.

Labor Commissioner Renee Campion said in a statement, “At the top of our minds in every discussion was to provide the highest-quality health care to our employees, retirees and dependents while at the same time controlling the ever-increasing costs of health care. We have found ways to achieve both, and part of that process is working through every detail and chasing down every possibility that could potentially meet these dual goals.”

She continued, “The Medicare Advantage program is an example of a program that continues to provide the same access to medical care for our employees, while providing necessary cost controls. Finalizing this change has taken much longer than everyone expected, but what we will have with these changes is a very strong health-care plan that provides improved benefits for our retirees and also allows them to continue being treated by the doctors that they feel comfortable with and at the hospitals that they want to go to.”

Some retirees had expressed concerns that other Medicare Advantage programs throughout the nation offered lesser benefits than traditional Medicare or were more costly to those who participated. They also worried that two major city hospitals, Memorial Sloan Kettering and the Hospital for Special Surgery, had not accepted Medicare Advantage patients. 

The unions and the city by mid-spring secured a commitment by both those hospitals to participate in NYC Medicare Advantage Plus, regardless of which of the two health-care providers was chosen to run the program.

There will be some new co-pays for retirees compared to the current Senior Care program offered by the city, among them $15 for specialist visits, diagnostic tests, mental health/substance use disorder, and rehabilitation services. In all those cases, however, according to charts that were provided to union officials prior to the vote, co-pays of that amount were scheduled to be imposed starting next January under the current Medicare plan.

In other areas, however, there are significant improvements in coverage that will potentially save retirees thousands of dollars in out-of-pocket costs.

One example is that retiree costs, which currently have no limit, will be capped at $1,470 a year. A Durable Medical Equipment benefit for employees that is currently capped at $2,500 will no longer have a limit.

A potentially huge savings for long-term hospital stays will be a feature of the new program. Right now, retirees who stay between 61 and 90 days in a hospital must pay a full coinsurance charge for that 30-day period, a 50-percent coinsurance for days 91-201, and full coinsurance for days 302-365. Under NYC Medicare Advantage Plus, there will be no coinsurance charge for any portion of their stays.

Mr. Nespoli said that benefit will mean, “If a person’s sick enough, they can stay long enough [to recover] and not worry about being bankrupt when they come out.”

Ambulance services are currently provided to Medicare retirees with a $25 deductible and a $2,500 annual cap. Under the new city plan, there will be no deductibles or annual limits.

While the new plan will require that an ambulance be deemed “medically necessary” to transport retirees, in cases where that standard isn’t met, for the first time those retirees will be entitled to 24 paid rides annually, up to 30 miles per ride, in other vehicles, including cars.

Other new benefits include 14 free meals following up  to four “events,” involving either an inpatient stay or certain weight/health conditions. There will be a hearing-aid allowance of up to $500 a year. And as part of the city’s effort to encourage “wellness” through healthier diet and exercise, retirees will receive up to $200 in gift cards for completing certain activities, and senior citizens with gym memberships will be enrolled at no cost in the Silver Sneakers program, which will provide them with online videos and classes and other related resources.

All terms will remain in effect for the next five years.

Five unions voted against the deal, according to one labor leader who took part in the discussions via Zoom: the 30,000-member Professional Staff Congress, which represents faculty at the City University of New York, the New York State Nurses Association, the Doctors Council, the Committee of Intern and Residents, and the Sergeants Benevolent Association.

All those unions except for the SBA had sought to have the vote delayed to allow for further discussion. A proposal to put it on hold until Aug. 31 was defeated during a meeting of the MLC Steering Committee, and a subsequent motion to push back the vote until the end of this month was rejected by the General Membership Committee. 

Even before presentations were made to MLC members in two morning sessions July 14, union leaders were expressing sharply different viewpoints about the proposal after receiving detailed written descriptions of what it would entail.

The PSC two days earlier made its first push for the MLC to delay the vote, with its new president, James Davis, saying in a statement, “Five days is not enough time to consult on such a consequential decision…this vote to seek savings  through the retiree medical plan comes at a time when the city can well afford to pursue alternatives.”

He argued that individual retirees should have a chance to review the agreement and provide input to their unions before a vote was held, and concluded, “Whatever its provisions, a plan to shift the cost-saving burden to union members and municipal employees does not bode well for the future. Higher costs may be demanded of union members down the line. The answer is not privatization. It is to continue Labor’s fight for a single-payer public health-care system and a system for New York that serves municipal workers fairly.”

Organization of Staff Analysts Chairman Robert J. Croghan took a contrasting view. He said the Democratic Socialists of America had been lobbying the unions to hold out for the single-payer plan, which had been championed during the Democratic presidential primaries in 2019 and early 2020 by both Bernie Sanders and Elizabeth Warren. “The impression we had,” he said in a phone interview, “was that it was not as good as what we had now.”

In fact, much of the momentum Ms. Warren had developed in the summer of 2019 was blunted because unions resisted her health plan because they were unwilling to give up some of the additional benefits their members were enjoying from employer-based programs they had negotiated.

Mr. Croghan said there were two  particularly pressing issues raised by his retired members while the MLC and the de Blasio administration were negotiating with each other and the two health-care providers.

“The first was, would they be able to keep their doctors? They will,” he said. “The second was, would they keep specialized care—and they will.”

He noted that one complaint about existing Medicare Advantage programs was that they featured excessive paperwork that was a deterrent not only for participants but for some physicians. But Mr. Croghan said that, “Previously, we would go to the doctor and get two bills: 80 percent would be paid by Medicare and the other 20 percent from our [union] health coverage.”

Under the new Medicare Advantage Plus program, he continued, “Now you’re only getting one piece of paper: from Medicare.”

Talking to his rank and file, Mr. Croghan said, “The main thing I got from my members over the past few months was they didn’t want much change, and this doesn’t require it.”

Mr. Nespoli voiced a similar sentiment, saying, “Very few people like changes,” especially when they are content with their situations. But he recalled something he was told more than two decades earlier, long before becoming president of the Uniformed Sanitationmen’s Association, by that union’s longtime financial consultant, Jack Bigel—one of the municipal-labor officials who, going back more than 50 years, placed a strong emphasis on building up fringe benefits like health coverage even if it meant sacrificing a bit in wage increases.

“Jack Bigel once told me, ‘Hey kid, if you’re around long enough, you’re gonna have to get used to change.’

“There’s some good benefits in this thing,” Mr. Nespoli added. “I think this program specially fits municipal workers.”

The one new financial burden retirees would face, Mr. Croghan said, was an “increase in co-pays for certain doctors’ visits.” But there was also better coverage in other areas under the program, he said, and on the whole “it would be extremely similar to what we had under Senior Care, which retirees have been extremely comfortable with.”

Speaking of both the MLC negotiators and the city’s team led by Ms. Campion and her top adviser on health-care issues, Claire Levitt, the OSA chair said, “I think this was a pretty good job they did, because this was definitely scary” to many retirees.