NYC Mayor, MLC Heads Continue to Push Retirees into Medicare (Dis)Advantage Following Latest Court Defeat

Municipal retirees are determined to keep fighting back against attempts by the Eric Adams administration and leaders of the MLC to force them into scandal-plagued for-profit private healthcare. Photo by Joe Maniscalco

By Bob Hennelly

A state appeals court has upheld a lower-court ruling the Adams administration can’t switch retired workers from Medicare to a private Medicare Advantage plan and force those who want to keep their traditional Medicare to pay more has added more pressure on the City Council to weigh in on the controversy while increasing the leverage of the the retired civil servants who successfully sued the city to stop the move.

In its Nov. 22 ruling the upper court affirmed the  March decision by state Supreme Court Judge Lyle E. Frank that the city’s plan to switch 250,000 retired  city employees to Medicare Advantage from Senior Care, a supplemental plan that covers the 20% of costs Medicare doesn’t pay, violated Section 12-126 of the city administrative code. That section, enacted in 1967, states that “the city will pay the entire cost of health insurance coverage for city employees, city retirees, and their dependents,” up to the legal limit. 

In the unanimous ruling the New York State’s Appellate Division’s First Department declared in NYC Organization of Public Service Retirees v. Campion that the lower court had “correctly determined that Administrative Code 12­-126 requires respondents to pay the entire cost, up to the statutory cap, of any health insurance plan a retiree selects. This interpretation comports with the plain language of the provision as well as its legislative history.”

In the initial roll out of the city’s Medicare Advantage Plan, the City maintained that if retirees wanted to opt out of the plan and keep their current coverage they would need to pay a $191 monthly premium.  Tens of thousands of city retirees opted out.  Subsequently, the two health insurance companies fronting the controversial plan withdrew.

In an odd alliance between management and labor, the Adams administration and the largest unions within the Municipal Labor Committee have been pressing the City Council to change  the city’s Administrative Code 12-126, as a way of getting around Judge Frank’s ruling which has now been affirmed on appeal. Several unions and retiree groups have opposed making the change to the Administrative Code.  

The ongoing battle over the future of the health care coverage for the city’s 250,000 retirees and its 300,000 plus active-duty workers comes as there’s a double digit spike in healthcare costs across the nation and a deteriorating fiscal picture for New York City as federal pandemic aid dries up but many related problems persist.

A STRONGER HAND?

“I think winning this case is a great asset for those that are concerned about their healthcare and who are retired,” Council Member Gale Brewer (D-Manhattan) told Work-Bites during a Nov. 22 City Hall interview. Brewer, who previously served on the City Council and as Manhattan Borough President, said retiree health benefits needed to be protected as “deferred compensation” for tens of thousands city workers  who got “lower salaries over the years but were promised good benefits at the end.”

Brewer said she’s working on convening a meeting of both sides on the debate in the hopes of finding some common ground.

City Council Speaker Adrienne Adams told reporters the court ruling and its implications were still being reviewed by the Council’s staff. 

“Of course, this decision is still brand new,” Adams said.  “So, we are moving deliberately and thoughtfully because we want to protect healthcare for our current municipal employees and retirees.”

“There are 51 members in the City Council and we are here for everyone so that’s why we are taking it very carefully and looking at it with a fine tooth comb,” Council Member Majorie Velazquez (D-Bronx) told Work-Bites during a City Hall interview. “We want to make sure that we are protecting our communities especially those that have invested so much not only into our city but also into our communities and that’s why we are taking out time and making sure we are hearing from everyone—directly from the retirees as well as the different labor groups that represent the active members as well.” 

Council Member Justin Brannan (D-Brooklyn), who also chairs the powerful City Council Finance Committee, said he favored a blue ribbon panel of stakeholders as a “transparent” way to move forward on what is a highly contentious issue. 

“I believe that everyone would agree that there is a covenant for city workers and their retirement benefits and I think that is something that is very sacred and something we should be sensitive and serious with,” Brannan said. “The fact that healthcare costs have gone through the roof is just an undeniable reality… We have to get everyone around the table and figure it out. I don’t know what our clock looks like, but that would make sense [forming a blue ribbon panel]. This is a big decision and it has to be done in an educated way with transparency.”

DEAL US IN

Marianna Pizzitola, a retired member of FDNY EMS and president of the NYC Organization of Public Service Retirees, which brought the lawsuit, is also calling for a blue ribbon panel,  says her group has already identified at least $325 million in potential healthcare savings for the city.

“We need the City Council to not introduce any legislation or amend the existing Administrative Code as it relates to this, until a meeting with the retirees is conducted,” Pizzitola said in a statement. “Now, it’s time for Mayor Adams and the unions to sit with the retirees to discuss healthcare savings. “Retirees have been heard by the courts and it is time for City Hall to hear and see us. Our time of service to this great City should not be ignored and our healthcare should not be scrutinized or watered down for someone else’s gain.”

“While we are disappointed by the court’s decision, we are evaluating our legal options,” said Jonah Allon, a spokesperson for Mayor Adams said in a statement..”We continue to maintain that the city’s position is firmly grounded in law, but today’s decision further underscores the urgency for the City Council to act and approve the administrative code change required to preserve a choice for retirees. The city is facing serious financial challenges and we need the partnership of the Council to provide this sensible path forward to contain skyrocketing health care costs.”

Michael Mulgrew, president of the United Federation of Teachers, one of the leading advocates for changing the Administrative Code and enabling the migration of city retirees to a Medicare Advantage Plan of the city’s design, said “the court's decision makes it clear - to preserve our retirees' choice of healthcare plans, the City Council must change the city's Administrative Code." 

“To categorize this as a victory is a disservice to retirees as a whole,” DC 37 Executive Director Henry Garrido in a statement. “The appellate court chose not to legislate from the bench and simply reaffirmed the need to provide choice in healthcare plans. We’re working with the City Council to ensure that choice is protected by amending the administrative code.” 

Despite heavy pressure from Garrido, who leads the city’s second largest umbrella union,  Mulgrew, the president of the United Federation of Teachers, the city’s largest union, as well as Harry Nespoli,  president of the Teamsters Local 831 and chair of the MLC, the City Council has yet to introduce legislation to eliminate the existing language that protects retired civil servants.

The debate over Administrative Code 12-126 has split the MLC with several unions opposing the change including the Uniformed Firefighters Association, the Uniformed Fire Officers Association, DC 37’s Local 2507, which represents FDNY EMS and Fire Inspectors, as well as the Professional Staff Congress, which represents the City University of New York faculty. Over the last several months these unions, along with the grassroots campaign spearheaded by the NYC Organization of Public Service Retirees has been lobbying individual City Council members to leave  Administrative Code 12-126 as is. 

In an October 28 letter to Municipal Labor Committee chairman Nespoli, Office of Labor Relations Commissioner Renee Campion wrote that unless the Council passed the change to Administrative Code 12-126 by Nov. 4, the Adams administration “would seek relief” from mediator Marty Scheinmen, to order a change that would also comply with a standing order from a state judge that the city continue to provide retirees a single health insurance plan without a premium option.

“The City continues to lose $50 million a month for every month this plan is delayed, putting our shared goals in significant jeopardy,” Campion wrote. “We must move forward with the MAP plan in any way that we can, as quickly as we can.” 

The ongoing debate is an outgrowth of last year’s blowback from a coalition of municipal retirees  against then-Mayor Bill de Blasio and the Municipal Labor Committee’s proposal to shift retirees to a privatized Medicare Advantage program in hopes of realizing a $600 million savings.

At the Nov. 22 City Council stated meeting when the entire body was assembling, UFT lobbyists were tracking down Council Members and handing them a multi-page handout calling for changing Administrative Code 12-126. The memo made the case that “healthcare costs have changed and the status quo is no longer an option. The city needs to find savings for employee healthcare and has long partnered with the MLC to find and maintain  those savings while providing high quality changes.”

The UFT briefing paper made the case that the change in the Administrative Code was essential “to protect choice and premium-free health care” that would “continue to require the city to provide a comprehensive, premium-free health plan.” The handout raised the possibility that if the “City Council fails to and the administrative code…the city may have no alternative but to impose annual health care premiums of roughly $1,500 for all in-service municipal employees and potentially also non-medicare eligible retirees.”

A STACKED DECK?

Retirees who oppose the shift to a Medicare Advantage plan point to a recent study by the Department of Health and Human Services Inspector General that found the plans run by for profit providers showed  the “plans sometimes denied or delayed patients’ access to medically necessary services, even though the requests met Medicare coverage rules.”

Around the same time that the fire unions announced a very public lobbying campaign to push back against any changes to the city’s administrative code, the New York Times published a devastating expose on the nation’s leading Medicare Advantage plans.

“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,” reported the Times. “If trends hold, by next year, more than half of Medicare recipients will be in a private plan.”

The newspaper reported that in “a survey of dozens of fraud lawsuits, inspector general audits and investigations by watchdogs” showed “how major health insurers exploited the program to inflate their profits by billions of dollars.”

Oren Barzilay, is the president of DC 37 Local 2507, which represents EMTs, paramedics and fire inspectors. Barzilay opposes the proposed changes to the Administrative Code and hailed the court decision.  

"It is clear that our retirees have paid their dues in return for their earned and guaranteed healthcare,” Barzilay said in a statement.  "Why would anyone want to make changes that could harm our retirees and potentially active first responders and other unions' members as well.  It is not surprising that the retirees won this court decision, yet again.  If all of the parties in this dispute could simply have gotten together, including having retirees represented at the table, we very likely could have solved this issue amicably and collectively.  However, some parties clearly prefer not working together.  Its a shame that this issue got to the point, that the courts needed to get involved and finally set the record straight."

James McCarthy, the president of the Uniformed Fire Officers Association, wants the City Council to leave the city’s Administrative Code unchanged as the best way to protect city retirees and what he sees as their deferred compensation that’s reflected in their current healthcare benefits.

“Even  our FDNY retirees like my father who retired in 1981 and his pension was $27,000 and any additional cost for healthcare is a burden,” McCarthy told Work-Bites. “It’s also for everybody else—like somebody who is making $40,000 a year with DC 37 — the reason you keep the job is for the healthcare not as much as for the pay—it’s the healthcare for you and your family.”