Will NYC Council Members Go Along With Privatizing Retiree Healthcare?
NYC Council Speaker Adrienne Adams. Photo by Bob Hennelly
By Bob Hennelly
The Adams administration Nov. 4 deadline for the New York City Council to approve a controversial revision of the administrative code to permit the shifting of city civil service retirees to a privatized for-profit Medicare Advantage plan came and went Nov. 4 without any action from the City Council.
“This is such a complicated issue right now,” City Council Speaker Adrienne Adams told reporters at a Nov. 3 press conference. “Right now, we are still discussing it and we are still receiving briefings — I kid you not — on a daily basis regarding this very, very critical matter. So, it’s under consideration. I can’t really share very much with you today because we are still being briefed on it as we speak.”
The Mayor’s press office would only say “we continue to engage our partners in the Council on the rule change.”
While Speaker Adams’ comments were deliberative in nature, several members from across the Council’s eclectic political spectrum were willing to go on the record opposing any change in the Administrative Code over worries about the potential impact on the city’s 250,000 retired civil servants who live on fixed incomes.
While some Council members at Thursday’s stated meeting were reluctant to publicly get out ahead of the Council’s leadership on the increasingly controversial issue that is still generating spirited street protests — others sounded pretty resolute in their opposition to changing Administrative Code 12-126.
Signaling Their Vote?
“I have yet to understand why we would take a good law that protects labor and change it to somehow protect labor when retirees are going to end up paying $2,400 a year,” said Council Minority Leader Joe Borelli, (R-Staten Island). “We have retirees in this city whose monthly pension and social security income amounts to a few thousands of dollars a month at best. This is a significant hit or its a loss of a good health plan.”
Brooklyn Council Member Charles Barron, (D-Brooklyn) said he was “100 percent with the retirees…because I think they have to keep the commitment they have because it’s beneficial for those who paid their dues and I think the Medicare Advantage approach is privatizing. It’s not benefiting those who sacrificed their lives and did all this study during the pandemic. I think it is a damn shame that we have a mayor that can’t see that.”
“Healthcare costs are out of control,” said Council Member Gale Brewer (D-Manhattan). “There’s no bill yet on this and nobody has signed on. I have been lobbied by both sides but at this point, I am supportive of the retirees.”
For some, the topic remains radioactive. When Politico's Marina Toure asked Council Member Mercedes Narcisse (D-Brooklyn) to confirm if she had been part of a Nov. 3 briefing with the Office of Labor Relations she would not confirm or deny but would only say “I can not give you an update on our private meeting. I am not going to address that.”
“It’s very challenging when you have people who don’t have a full understanding of it and you have the retirees who don’t want to pay extra — they are on a fixed income,” said Narcisse, herself a registered nurse. "You have to take everything into consideration. I am here to strike a balance and it [healthcare] is costing us a lot of money and we know something has to be done about it.”
Narcisse said she “personally loved the idea of single payer” like the proposed New York Health Act, but that she “had yet to explore the ins and outs of it.”
“At the end of the day, [the solution] has to be data driven so that it benefits the majority of the people we serve.” she said.
Council Member Joann Ariola (R-Queens) told Work-Bites she had fielded thousands of queries from constituents on the Medicare Advantage controversy and that it was running 10 to 1 against making the change in the Administrative Code sought by Mayor Adams and the MLC leadership.
“”I don’t think it is necessary,” Ariola said. “If they are going to change the insurance they should start for the new hires — then you are coming in and you will know what you are getting into. People don’t work for the City of New York or in government to get rich, but they know they will be taken care of in their retirement, and it is unfair to change the game now and then apply some kind of buy-in.”
Ariola expressed concern that any additional out-of-pocket cost for retirees “could mean they have to make a choice between being housed or having their healthcare.”
“It’s just unfair and I am hearing about it everywhere I go,” she said.
TIGHTENING THE SCREWS
As Work-Bites previously reported, in an October 28 letter to Municipal Labor Committee chairman Harry 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. The NYC Organization of Public Service Retirees countered the move threatened retirees’ continuity of care, would cost more, and would cover less as providers would squeeze more profits out of the conversion.
Not every public union has embraced the Medicare Advantage strategy. The Uniformed Firefighters Association, Uniformed Fire Officers Association, DC 37 Local 2507, representing EMS, Local 1 Plumbers, NYC Local 294 Laborers, as well as the Professional Staff Congress-CUNY are opposing the change to the Administrative Code and the shift to Medicare Advantage.
The New York City Organization of Public Service Retirees successfully challenged the city in court bringing the implementation of the plan to a standstill at the start of the Adams’ administration. That litigation continues.
Tens of thousands of city retirees opted out. One key issue was a requirement that city retirees who opted out of the new offering would have to pay a $191 monthly premium for their old plan. Subsequently, the two health insurance companies fronting the controversial plan withdrew.
In a recent broadcast email to its members, the United Federation of Teachers [UFT] described the city’s October 28 letter as a “bombshell that puts our premium-free health care in jeopardy.” The advisory explained the City also put the unions on notice “of its intent to enroll all Medicare eligible city retirees in a NYC Medicare Advantage plan and eliminate all other retiree health plans, including GHI SeniorCare. If the unions don’t go along with it, the city has threatened annual health care premiums of roughly $1,500 for all in service municipal employees.”
STAY THE COURSE
In a Nov. 4 interview, Harry Nespoli, chair of the Municipal Labor Committee said “everything’s waiting for the courts. The retirees have it in the courts — they are the one that stopped it. So, now we have to wait for the courts.”
Nespoli, who also leads Teamsters Local 831, which represents the Uniformed Sanitationmen’s Association, confirmed the MLC is still pushing along with the Adams administration for the conversion for retirees to Medicare Advantage. “Without a doubt, it’s the only way out because its going to guarantee $600 million over the next six years and that’s coming from the companies that are handling this thing and doctors will be paid by the federal government. It’s a win-win thing but just a small group of retirees don’t want to accept the change,” Nespoli said.
The Adams administration’s full court press to reduce healthcare costs comes amidst a national healthcare insurance cost explosion which has hit public employers and employees with double-digit rate hikes like the 20 to 24 percent facing New Jersey’s public workforce — the overwhelming majority of which were deemed essential workers during the pandemic.
The leaders of the city’s biggest municipal unions agree with Nespoli that the windfall from the Medicare Advantage enrollment is the way to go, while conceding that ultimately the healthcare cost crisis needs a federal remedy.
“This is a national crisis right now,” said UFT President Michael Mulgrew, who has been pressing for the Administrative Code change and the shift to Medicare Advantage. “With my work at the AFT I help locals across the country and they are getting killed on healthcare. They are literally getting 3-percent raises and taking home less money because the insurance companies and hospitals are running amuck. They don’t know what to charge. How can you do actuarial tables when we have been in a pandemic for a year?”
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.”
In an information sheet to its members, DC 37, the city’s second biggest union with dozens of locals that represent 150,000 members and 89,000 retirees echoed Mulgrew’s warning that without amending the administrative code “active members and retirees could be forced to pay premiums for themselves and their dependents.”
“New York City is the only major municipality that provides this benefit for city workers, and the City needs every available tool to retain and recruit its workforce. If the administrative code is not amended, retirees will not keep their current healthcare as-is—the current plan is not financially sustainable,” according to the DC 37 fact sheet.
WAITING FOR GODOT?
The unresolved issue of retiree healthcare and the implications for impact on active employees is a major impediment to city unions getting on with bargaining their contracts which in many cases have already lapsed.
“I think I was one of the first unions to reach out to City Hall to try and start negotiations for the next round of bargaining to get detectives their well-deserved increase in salary but the Medicare Advantage situation is holding everything up up because it could have a devastating effect on both our active and retired members,” Paul DiGiacomo, president of the Detectives’ Endowment Association, told City & State. “My strategic analysis is if I settle a contract now and get 3%, 4%, 5% over five years, whatever it may be, and then the health care costs come back and they say we have to contribute 3%, 4% or 5%, where’s the raise?”