New York City retirees score major victory in Medicare Advantage fight

By Annie McDonough
August 11, 2023
 

A state Supreme Court judge blocked New York City from switching municipal retirees to a Medicare Advantage plan aimed at saving hundreds of millions of dollars in health care costs, delivering retirees a key victory in a hard-fought battle to keep their current coverage.
 
“This is now the third time in the last two years that courts have had to step in and stop the City from violating retirees’ healthcare rights,” Marianne Pizzitola, president of the New York City Organization of Public Service Retirees, said in an emailed statement.  “We once again call on the City and the Municipal Labor Committee to end their ruthless and unlawful campaign to deprive retired municipal workers of the healthcare benefits they earned.”
 
Mayor Eric Adams’ administration signed a contract with Aetna earlier this year for a Medicare Advantage plan that the city has said would save $600 million a year on retiree health care costs.  (Retirees fighting the switch have disputed this figure.) The switch from retirees’ traditional Medicare plans was set to go into effect on Sep.  1, until Manhattan Supreme Court Judge Lyle Frank granted a temporary restraining order in July.
 
Retirees have fought the switch, arguing that privatized Medicare Advantage plans will limit access to their medical providers, could come with higher out-of-pocket costs, and have been found to deny necessary care.  Retirees currently enroll in traditional Medicare, along with a city-subsidized supplemental coverage plan known as Senior Care.
 
A spokesperson for Adams said that the city plans to appeal the decision, and pointed to benefits of the Medicare Advantage plan that it negotiated alongside the Municipal Labor Committee, including a lower deductible, a cap on out-of-pocket expenses and benefits like fitness programs.  (Pizzitola has said that these don’t amount to improvements, noting that once retirees meet their deductible with Senior Care they don’t have out-of-pocket expenses.)
 
The city has also characterized the switch as an essential savings initiative.  “It would save $600 million annually, especially critical at a time when we are already facing significant fiscal and economic challenges,” the spokesperson said in a statement.  “This decision only creates confusion and uncertainty among our retirees.”
 
The state Supreme Court ruling received bipartisan praise from New York City Council members on Friday, including Democrat Tiffany Cabán and Republicans Inna Vernikov and Ari Kagan.
 
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