Mayor’s ‘Expert’ Panel Stumped At NYC Council Hearing On Retiree Healthcare
Officials representing Mayor Eric Adams’ administration had a hard time answering questions at a Jan. 9 City Council hearing on changing Administrative Code 12-126 and privatizing municipal retiree healthcare. Above: Municipal retirees hoping to attend the hearing wait outside the City Hall gates. Photo By Joe Maniscalco
By Bob Hennelly
Several New York City Council members at the Jan. 9 Civil Service and Labor Committee hearing on the future of healthcare for the city’s active and retired civil servants appeared to stump the expert panel sent by the Adams administration who repeatedly had to commit to following up later with their answers.
While the Council Committee’s agenda item was proposed changes to the city’s Administrative Code — the questions from the Council were largely about the nature of the Medicare Advantage deal Mayor Adams and the Municipal Labor Committee are currently negotiating with Aetna for city’s retirees with a planned summer rollout.
The marathon hearing, which started in the morning and went into the night, required overflow rooms to accommodate the public. For several hours, dozens of city retirees testified, most critically about the proposed administrative code changes and the city's plans to embrace Medicare Advantage.
Passions were running high, but Council Member Carmen De La Rosa, chair of the Civil Service and Labor Committee, and City Council Speaker Adrienne Adams set a dignified and respectful tone from the outset with De La Rosa ordering the Council Sergeant Arms to eject a heckler who sounded off yelling “ liar, liar” during the opening remarks.
As a consequence of establishing and maintaining good order, individual Council Members, from all sides of the issue, were able to ask pointed questions that the Adams administration’s panel often struggled to answer.
Testifying on behalf of the Adams administration was Ken Godiner, with the Mayor’s Office of Management and Budget, as well Daniel Pollak and Claire Levitt from the New York City Office of Labor Relations. Pollak took the lead in responding with Levitt, a health care expert, backing him up.
Council Members were particularly concerned about the impact on city retirees who would choose to opt out, like those that opted out of the city’s initial Medicare Advantage offering last year by paying $191 monthly premium, often out of concern over maintaining continuity of care with their specialists.
Sixty-three-thousand retirees opted out. The two health insurance companies fronting the plan that drew the court challenge from retirees, subsequently withdrew.
“Do you have an understanding of how many current retirees can reasonably afford the $191 monthly charge — do you have the current breakdown of city retirees disaggregated by annual income, rent burden status and other indications of economic health?” Council Member Crystal Hudson (D-Brooklyn) asked the panel.
“That’s not information we have,” Pollak responded.
Members pressed the administration’s experts for more details on the looming five-year Aetna deal, but could not get a commitment that they would get to see a draft of the contract. Thanks to close questioning, they did glean the preliminary Aetna pact called for no premium for five years and that the city had committed to pick up whatever increase came along after that.
In his questions to the panel, City Council Member Charles Barron (D-Brooklyn) asked if Aetna, which is owned by CVS, was under investigation.
“I am not sure what that investigation would be about, but we look into it further,” Pollak responded.
Back in October, the New York Times published a head hitting investigative piece headlined “How Insurers Exploited Medicare for Billions” that alleged that “most large insurers in the program have been accused in court of fraud” which referenced Aetna.
“Medicare Advantage, a private-sector alternative to traditional Medicare, was designed by Congress two decades ago to encourage health insurers to find innovative ways to provide better care at lower cost,” the Times reported. “If trends hold, by next year, more than half of Medicare recipients will be in a private plan.”
The Times continued. “Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits. And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to over diagnose their customers crossed the line into fraud.”
“The fifth company, CVS Health, which owns Aetna, told investors its practices were being investigated by the Department of Justice,” the Times reported.
Barron went on to blast Aetna for its documented role in selling insurance to slave owners before Emancipation which no one on the mayor’s panel had any comment on.
“I would never ever…support Aetna getting a contract from the government because this is the same company that provided insurance to slave holders during the enslavement period and when we took them to court, they admitted it and said, ‘we did it’ and that was it,” Barron said. “So, we shouldn’t be doing business with a corporation like Aetna that was engaged in the slave trade in the slave era.”
In 2000, the Associated Press reported that Aetna had acknowledged that in the 1850s it “reimbursed slave owners for financial losses when those they enslaved died.”
“Aetna has long acknowledged that for several years shortly after its founding in 1853 that the company may have insured the lives of slaves,” an Aetna spokesman told the AP at the time. “We express our deep regret over any participation at all in this deplorable practice.”
Aetna did not respond to an email request for comment by press time.
The move to change the Administrative Code that’s being pushed by Mayor Adams and the Municipal Labor Committee came after a successful legal challenge from a coalition of municipal retirees against then-Mayor Bill de Blasio and the MLC’s shift of retirees to a privatized Medicare Advantage program in hopes of realizing a $600 million savings.
That strategy was subsequently endorsed by Mayor Eric Adams, who invoked his own status as a former NYPD police captain with his endorsement of the shift to Medicare Advantage, a move already made by several states and labor unions around the country who were attracted by the federal subsidy.
The NYC Organization of Public Service Retirees asserts the move threatens retirees’ continuity of care, would cost more, and would cover less as providers would squeeze more profits out of the conversion. NYCPSR supports their critique with reporting in the New York Times, Kaiser Health News as well as highly critical audits issued by the Inspector General for the U.S. Health and Human Services Department.
The Adams administration and the MLC claim time is of the essence because its Health Stabilization Fund, created in 1984, used to cover healthcare obligations and help defray premium costs, is running out of money, putting at risk the premium-free health care that active and retired city employees continue to enjoy.
They maintain that the change in the Administrative Code language they are seeking will give the city the flexibility it needs to offer retirees choices in terms of health care that will continue to include premium-free options.
Several retiree groups as well as some unions, like the Uniformed Fire Officers Association, DC 37 Local 2507, which represents EMTs, paramedics and fire inspectors, and the Professional Staff Congress, representing City University of New York faculty, oppose the change because they believe it was weaken both active and retired protections.
Without referencing Aetna, Council Member Shekar Krishnan (D-Queens) asked the expert panel to address the spate of news reports and government reports that have flagged significant problems with the Medicare Advantage model.
“And so, knowing that, how do you respond to the problems and concerns raised by our own federal government and other concerns about denial of care, having to seek numerous approvals that were denied—how would you respond to these charges and findings?” Krishnan asked.
“We read the same New York Times articles and I think it’s true that some Medicare Advantage plans have been appropriately questioned by the New York Times and others, but we feel confident that the plan we developed with Aetna is not going to be subject to those issues,” said Levitt. “First of all, it’s a PPO plan and not an HMO so any retiree can see any Medicare provider. We also negotiated with Aetna to remove more than 70 percent of the pre-authorizations that were discussed in most of the articles. We also plan to oversee this program with a great deal of attention.”
Levitt told another Council Member that the Aetna plan was still going to require preauthorization for inpatient stays, some types of surgeries, certain types of durable medical equipment, spinal procedures, reconstruction procedures and certain medications.
Levitt, a deputy commissioner for OLR, came to work as a health care cost management expert for the city in 2014 after being a top executive at Alicare Medical Management and the Amalgamated Life Insurance Company.
Several members of the Council framed their questions while making a declaration that they believed healthcare was a basic human right while suggesting that Medicare Advantage, while saving the city money, could obstruct access to care for retirees.
Others argued that the city had failed for many years to address what they saw as the underlying issue of runaway hospital costs. Council Member Julie Menin (D-Manhattan) has introduced legislation to establish the Office of Healthcare Accountability which would have the power to audit public employee health care expenditures, which are running close to $11 billion a year.
“For a woman giving birth at Montefiore they are being charged $55,000 for childbirth — at another New York City hospital it’s $12,000 — a routine colonoscopy is $10,000 at one hospital--$2,000 at another,” said Council Member Julie Menin (D-Manhattan). “So, my question is why hasn’t the city issued an RFP in the past decade to renegotiate health insurers to drive down costs?”
Pollack told the Council “That’s exactly what we are doing right now” with the city’s latest RFP for a healthcare provider for active city workers that can save the city $1 billion a year without a diminution in the quality of care.