NYC Municipal Retirees Win Another Court Victory Against Medicare Advantage!
NYC municipal retirees fighting the push to privatize their healthcare won another victory in court this week. Photo by Joe Maniscalco
By Steve Wishnia
A state appeals court on Nov. 22 unanimously upheld a lower-court ruling that the city administration can’t legally switch retired workers from traditional Medicare to a private Medicare Advantage plan, and can’t force those who want to keep Medicare to pay more.
“The court correctly determined that Administrative Code §12126(b) (1) 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,” the Appellate Division’s First Department declared in NYC Organization of Public Service Retirees v. Campion.
“WE WON!” Marianne Pizzitola, president of the New York City Organization of Public Service Retirees, exclaimed in a statement immediately after the decision. “This means TWO courts interpreted the law the same way, and the retirees are vindicated in our effort to push back on the city from trying to take away our benefits.”
The appeals court upheld a March ruling by state Supreme Court Judge Lyle E. Frank that the city’s plan to switch up to 250,000 retired and disabled 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.
The city argued that it was following that law as long as it covered the full cost of one health plan it offered retirees, and that it could legally charge people who wanted a different plan more — about $192 a month for the Medicare/Senior Care combination.
“Nothing in the statutory text or history supports respondents’ interpretation,” the appeals court responded.
“The court’s decision emphasizes the need for a blue-ribbon panel to break the impasse,” Stuart Eber, president of the Council of Municipal Retiree Organizations of New York City, said in a statement to Work-Bites. “There are better ways to save money on health care while preserving our Medicare and not throwing taxpayers’ money down the corrupt Medicare Advantage rabbit hole.”
City Council Speaker Adrienne Adams told reporters Nov. 22 that she couldn’t comment on such a panel because the Council was “still reviewing” the “brand-new” decision.
The Council approved the Medicare Advantage plan in July 2021, a move supported by the Municipal Labor Committee, the group of 102 city employees’ unions that negotiates benefits. They contended it was essential to reduce the city’s health costs, and to enable the unions to achieve the $600 million in health-care savings they had agreed to make in 2018.
The NYC Organization of Public Service Retirees, one of several retiree groups that wanted to keep Medicare, filed a lawsuit arguing that the city government had acted illegally in imposing the switch to Medicare Advantage. Opponents said the Medicare Advantage plan would provide “significantly worse” coverage than what retirees now have, as many doctors and hospitals that accept Medicare would not accept it, patients would have to pay full price for care outside its network, and the private plans’ insistence on prior authorization for medical procedures would delay or deny essential care.
They also accused the city and the MLC of sacrificing retirees in order to achieve the $600 million in savings.
In response, Mayor Eric Adams’ administration, backed by the MLC, has proposed amending Section 12-126 to add a clause that the city and the MLC could jointly agree on a new benchmark plan for “any class of individuals eligible for coverage.” That would include active members as well as retirees.
“Contact your City Councilmember today and tell them: Protect Premium-Free Healthcare for City Employees, Amend Admin Code 12-126!” District Council 37, the largest union in the MLC, urged members in a message Oct. 31.
“The money that pays for city employee, retiree, and dependent health care has run out,” DC37 President Henry Garrido wrote. “The status quo is not financially sustainable.”
Without changing the law, he said, the consequences would be the city imposing premiums for active workers and retirees, and “the removal of choice in your health-care plans.”
Legislation to amend Section 12-126 has not yet been introduced in the Council. “We are still discussing the issue internally and we are receiving briefings,” Speaker Adams said at the Nov. 22 press conference. “We are moving deliberately and carefully because we want to protect health care for our current municipal employees and retirees.”
If the Council doesn’t change the law, another possibility is what Pizzitola calls the “nuclear option” — the arbitrator who oversees the health-savings deal eliminating all other health-coverage plans for retirees. “Our work is NOT done!” she said.
“The courts continue to side with the retirees because we are in the right,” Sarah Shapiro of the Cross-Union Retirees Organizing Committee, a retired teacher, told Work-Bites. “The city has been trying to change the law because they knew they would lose again in the courts. But we will keep fighting.”
She accused the city, Garrido, and United Federation of Teachers President Michael Mulgrew of spewing “disinformation” that “we won’t have choice unless they change the administrative code.”
“The arbitrator so far is like a bogeyman,” retired teacher Marcia Biederman said. “The MLC leadership keeps saying, ‘oooh, if we don’t amend, the city/arbitrator will stick you into the nuclear option.’ But there is no Medicare Advantage plan to stick us in. The insurance companies ain’t interested unless 12-126 is amended.”
Additional reporting by Joe Maniscalco and Bob Hennelly