Unions approve $22.5M deal to privatize retired city workers’ insurance.

The Municipal Labor Committee, a group that represents retired city workers, voted Wednesday to shift 254,000 retirees to a Medicare Advantage insurance plan in an effort to help the city cut its ballooning health care costs. Story from Crain’s Business by Maya Kaufman. July 15.

Nonprofit insurer EmblemHealth and insurance company Empire BlueCrossBlueShield have a $22.5 million city contract to administer the plan, which is scheduled to go into effect Jan. 1. The contract is for five years and includes three options to renew for two years each, City Hall spokeswoman Laura Feyer said.

City officials said the switch from Medicare to Medicare Advantage will reduce its health care spending by $500 million to $600 million annually thanks to additional federal subsidies that Medicare Advantage plans enjoy. The city spends more than $1 billion per year on retiree benefits.