By Joe Maniscalco

Cross-Union Retirees Organizing Committee [CROC] member Julie Schwartzberg was right on the money a few weeks ago, in New York City when she called the ongoing campaign to strip municipal workers of their traditional Medicare health benefits and push them into a profit-driven Medicare Advantage program a “national issue.”

“They’re doing this all over the country — the insurance companies are lobbying for it,” Schwartzberg correctly pointed out before kicking off CROC’s latest protest march against privatization up Broadway — the Canyon of Heroes — on March 9. The same day — at virtually the same moment — members of the Municipal Labor Committee [MLC], the umbrella organization representing NYC’s public sector unions, were also voting for a Medicare Advantage contract with insurance giant Aetna without ever having reviewed the finalized document.

Seeing the MLC vote to make her Medicare benefits disappear was, Schwartzberg added, the “saddest day of my life.”

But it’s not just the profit-driven insurance companies like Aetna leading the nationwide Medicare Advantage charge — operatives from both the Democratic and Republican parties and the AFL-CIO, too — are, and have been, deeply invested in the coast-to-coast campaign to further privatize traditional Medicare.

So much so, that declarations from NYC Council Speaker Adrienne Adams [D-28th District] asserting city officials were still seeking “clarity” about the Medicare Advantage issue as late as mid-November — as well as the seeming obliviousness various union leaders around NYC continue to express about the fundamental difference between traditional Medicare and Medicare Advantage plans — begs credulity.

Marianne Pizzitola, president of the New York City Organization of Public Service Retirees [NYCOPSR] and FDNY EMS Retirees Association, issued a statement following the MLC vote calling it a “sad day in labor history” and saying her group’s attempts to clarify the differences between traditional Medicare and profit-driven Medicare Advantage have been repeatedly met with “apathy and indifference.”

“This historic decision lies squarely on the backs of labor leaders,” Pizzitola said. “Retired union workers have been trying to educate their former unions as to the differences between Traditional Medicare with a supplement and privatized managed Medicare Advantage for the last two years. Labor should never support privatizing public healthcare or stripping retirees of vested earned benefits.”

In actuality — rank and file retirees across the country, along with individual AFL-CIO leaders past and present, have at least since 2021, warned against trade union support for profit-driven Medicare Advantage programs.

Calling Liz Shuler

Washington State has the third-highest union density in the nation. Jeff Johnson was a member of the Washington State Labor Council, AFL-CIO for 32 years and served as its president for nearly a decade. On January 4, 2018 the Seattle mayor’s office decided to declare it “Jeff Johnson Day” in the Emerald City.  

These days, Jeff heads up the Puget Sound Advocates for Retirement Action [PSARA] — a group of local Washington State civil service retirees who — like their counterparts in New York City — have successfully fought back against concerted efforts to push them into Medicare Advantage.

“Privatizing Medicare ultimately hurts seniors whether they’re union or not union,” Johnson says. “It hurts retirees. It hurts the quality of their healthcare. Right now, they’re using algorithms to deny seniors care — it’s just crazy. I’m ranting here, sorry — my blood starts to boil.”

Johnson has known AFL-CIO President Liz Shuler since she was an IBEW 125 staffer in Portland, Oregon. He expresses great respect for her and supported her rise to national power. Last year, Johnson wrote a letter to Shuler imploring her to “please stand up” against Medicare Advantage and ACO REACH “because it will blow the privatization doors open.”

ACO REACH — an acronym for Accountable Care Organizations and Realizing Equity, Access and Community Health — is the Trump-era pilot program that the Biden/Harris administration renamed and officially launched on January 1, of this year under the guise of creating more equity in the healthcare system.

“Quite frankly, it’s bullshit,” Johnson says. “When you take a look at the application for ACO REACH entities, they just have to write up an equity plan; it doesn’t have to be a place, there’s no measurement or accountability standards built in that actual equity is provided.”

In fact, Johnson argues, it’s just the opposite.

“In the preliminary stages of ACO REACH they discriminated against poorer people in inner-cities because their community ratings were too high and it would make less profit for these Wall Street firms,” he says. “It’s a travesty.”

The response Jeff ultimately got back from Shuler’s office left him cold.

“Medicare Advantage is horrible, ACO REACH will end traditional Medicare as we know it — and the response I got back was, ‘thank you for your concern, we’re monitoring it,’” Johnson says. “But the fact is, the AFL-CIO has a Medicare Advantage program for the past year.”

‘The Nanny’ Absolutely Loves Medicare Advantage — Amazon, Too!

The AFL-CIO declined to comment on this story. But this past December, SAG-AFTRA — the union representing about 160,000 film and television actors, radio personalities, recording artists and other media professionals around the globe — introduced three Medicare Advantage plans for its members in partnership with the AFL-CIO.

“We were determined to create easy, more comprehensive and better-than-ever options for our Medicare-qualified members and we did it,” SAG-AFTRA President Fran Drescher proclaimed at the rollout. The new plans, according to the union, are available to all of SAG-AFTRA’s Medicare-eligible members, “regardless of their qualification for the SAG-AFTRA Health Plan.”

“This is a place where I think unions have it wrong,” Johnson says. “This is not about providing more choices for public service retirees. The way Medicare Advantage programs work is that when you have an organization that brings members automatically into the Medicare Advantage program — those organizations get a finder’s fee. They get paid, okay?”

The Centers for Medicare and Medicaid Services officially calls those monies “referral fees.”

“Insurance brokers and others receive compensation for doing referrals to Medicare Advantage plans. So, it is very, very layered. There’s money behind this,” says Laurie Weidner, executive director of the Retired Public Employees Council of Washington, a non-profit, labor-aligned statewide organization serving about 12,000 retired public sector employees.

Pizzitola sees those same referral fees as motivation enough for the AFL-CIO to get behind the further proliferation of Medicare Advantage programs.

“I think the unions are sadly seeing membership decline, union dues decline, and they need a way to fund themselves,” she says. “And they decided to do it the way AARP funds themselves: putting Medicare Advantage plans in place, so they can capture whatever savings or kickback schemes that are in those plans.”

Indeed, it looks like everyone wants in on the Medicare Advantage action — including Amazon. In February, the Seattle-based retail giant sewed up its $3.9 billion all-cash acquisition of a healthcare chain provider called One Medical. Advisory Board writers Ty Aderhold and John League call the deal “among the biggest investments ever in care delivery by a non-healthcare entity. According to the site, “Amazon could also expand into the Medicare Advantage market, given One Medical’s acquisition of Iora in 2022.”

“The forces that want to further privatize Medicare recognize that this is the Goose that Laid the Golden Eggs,” Johnson says. “The estimates are that in four to five years, Medicare spending will reach about $1.6 trillion a year. And if you think about it, a 15 to 25-percent cut of that going into the pockets of insurance companies and Amazon and things like that — that is a huge profit center. Iora already makes over half their profits through Medicare. Amazon clearly sees healthcare and healthcare of seniors as a profit center for them.”

A Trojan Horse/Foxes in the Hen House

In Vermont, Republican Governor Phil Scott calls stripping retirees of their traditional Medicare benefits and pushing them a into Medicare Advantage a cost-saving “win for everyone.” The Vermont State Employees Association [VSEA], however, is fighting back hard, citing privatization’s penchant for denying senior citizens the care they need when they need it most.

Studies show disenrollments from Medicare Advantage plans are, indeed, on the rise — up from 10 percent in 2017 to 17 percent in 2021. The Kaiser Family Foundation [KFF] also finds that over two million prior authorization requests were denied that same year — with only 11 percent appealed.

“This suggests many abandon the daunting appeals process altogether and that millions are not getting the care they need,” KFF researchers wrote in February. “Over 80 percent of the appealed denials were overturned, but even successful appeals come at a cost, taking time and resources that some beneficiaries cannot afford.”

The Vermont State Labor Council, AFL-CIO is backing the VSEA against the governor, and says if and when VSEA chooses to engage in direct action in defense of their retirees healthcare, “the Vermont AFL-CIO would not hesitate in deploying a delegation of our Union members to act in alliance with VSEA.”

Vermont State Labor, AFL-CIO President David Van Deusen calls Medicare Advantage “little more than a money making scheme for capitalist interests throughout the country" that “lowers standards or care, is fraught with problems, and dehumanizes coverage decisions which puts the lives of retired Union workers in jeopardy.”

The AFL-CIO reformer further warns, “Any so-called labor leaders who turn their back on the needs and interests of the rank & file (be they active or retired) and instead sides with the big capitalists in their efforts to generate private profit through the exploitation of workers, must be understood as a Trojan Horse within the Labor Movement.”

“In short,” Van Deusen says, “If the Labor Movement is to realize its destiny as the vehicle for foundational progressive change, those elements within our ranks which are unveiled as more aligned with our enemies than the working class, must be purged and replaced in their positions of influence with rank & file activists who are unafraid and unhesitating in their commitment to the fight at hand and that which will come.”

New York City municipal retirees — all of them committed and lifelong trade unionists — have long held that being stripped of their traditional Medicare benefits not only hurts them — it undermines the entire labor movement as well.

Work-Bites reader Blair F. Bertaccini’s recent comment saying in part, “[MLC heads] Michael Mulgrew and Henry Garrido sound like salesmen for the insurance industry rather then leaders of workers,” is typical of that sentiment.

At 90, Dr. Leonard Rodberg, professor emeritus of Urban Studies at Queens College in New York City is one of the fiercest opponents of Democratic Mayor Eric Adams’ relentless drive to Medicare Advantage. Nevertheless, the veteran academic says he’s willing to accept labor leaders supportive of the privatization scheme are “principled, honorable people” who simply believe “Medicare Advantage is good because Aetna tells them this is good as SeniorCare [Medicare].”

“It’s just a lie — and they bought it,” Dr. Rodberg says.

Johnson maintains bigwigs from both the Republican and Democratic parties have been pushing healthcare for a long time, and that the Centers for Medicare and Medicaid Services has become a “revolving door for the insurance industry.”

He’s critical of Dr. Elizabeth Fowler — deputy administrator and director of the Centers for Medicare and Medicaid Innovation and former executive vice-president of programs at the Commonwealth Fund and vice-president for Global Health Policy at Johnson & Johnson — for her role in crafting the Senate version of the Affordable Care Act [ACA] while acting as Chief Health Counsel to Senate Finance Committee Chair Max Baucus [D-MT].

“She is largely responsible for the fact that we don’t have the ability to negotiate over prescription drugs; why there was not a public option within the ACA; and she has been in the insurance industry,” Johnson says.

A “small, little paragraph” within the “humungous” ACA bill, Johnson points out, allows for “different forms of providing Medicare without Congressional approval.”

“That’s how ACO REACH or prior to that, Direct Contact under the Trump administration, came about,” Johnson says. “It was, ‘We’re gonna open up Medicare to Wall Street and Congress can’t take it away from us.’”

Johnson says the Biden administration did shut down one of Trump’s pilots — but the other they “rebranded as ACO REACH.”

“The changes were slight,” he says. “They’ll crow about how they built more accountability into this program, putting sidewalls around boards of directors on ACO REACH, and how there has to be providers and consumer reps. But the providers work for the insurance companies and the Wall Street firms that own these ACO’s.”