Lawsuits, Protests, Lobbying: Uproar as Retirees Fight NYC Unions over Medicare

NY City Council plans to vote this month on a Medicare Advantage option for union retirees. The specter of more lawsuits looms over the entire process

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Mike Antonucci’s Union Report appears most Wednesdays; see the full archive.

Groups of retired New York City employees are fighting their own unions over a plan to move them from their current health insurance coverage into a Medicare Advantage plan.

Retirees have filed lawsuits, lobbied the City Council and protested outside the headquarters of the United Federation of Teachers, which represents New York’s public school employees and retirees. They are trying to upend an agreement between the city and its labor unions designed to control rising health insurance costs.

The details are complex, but the gist is that many retired city workers are enrolled in traditional Medicare, which is managed by the federal government and covers about 80% of health care costs. New York City’s administrative code requires the city to cover the remainder for all its retirees and their dependents. The city is responsible for paying the insurance expenses of more than 1.2 million people.

Over the last decade, the costs have begun to drain the city’s health care fund, leading former Mayor Bill de Blasio to negotiate reduction targets with the Municipal Labor Committee, the umbrella group representing the city’s 102 public-sector unions, including the teachers union.

In 2014, the two sides agreed to measures to save $3.4 billion over four years. This was evidently successful, and a successor agreement in 2018 sought to save an additional $1.1 billion over three years. This agreement included the establishment of a Medicare Advantage option.

Medicare Advantage plans are required to provide similar coverage to that of traditional Medicare, but they are administered by private health insurance companies. To draw business, they often offer additional benefits, such as dental and vision care or prescription drug coverage. The main disadvantage is that a retiree can be limited to the insurer’s health care provider network. Currently, almost half of Medicare recipients are covered by Medicare Advantage.

What has some retirees up in arms is that the city’s health care fund “is effectively out of money,” according to the arbitrator in the Medicare Advantage negotiations. And in the rarest of events, the city, the labor committee, the UFT and the arbitrator all agree that the only way to maintain premium-free health insurance for retirees is to move them into a Medicare Advantage plan.

Retirees who want to stay on traditional Medicare will be able to do so, but they will have to pay a premium, currently computed at $191 a month.

This did not sit well with a significant number of them, who formed the New York City Organization of Public Service Retirees and sued the city. A judge issued a temporary injunction in October 2021, ruling that retirees had not been given enough information.

This prompted the teachers union to issue talking points about the proposal, including “7 things to understand about Medicare Advantage and NYC retirees.” The organization responded with “7 Lies the UFT Spews about Medicare Advantage and NYC retirees.”

In March, a state Supreme Court justice ruled that the Medicare Advantage plan could go forward, but retirees who chose traditional Medicare couldn’t be required to pay premiums. However, he also said the city was not obligated to provide more than one coverage option for retirees.

This further complicated matters and led to the current showdown. According to the court’s interpretation, the city had the right to force all retirees into Medicare Advantage. To prevent this, the committee wants the City Council to amend the administrative code to allow retirees to keep traditional Medicare (and pay premiums) if they so choose.

That is where the situation stands now, but the retirees group rejects all these arguments. It doesn’t want the code amended, nor does it want changes to the traditional Medicare coverage retirees have had for years. And it lays the blame firmly at the doorstep of the labor committee and UFT.

“For our former unions and the City of NY to strip benefits away from us, automatically enroll us in a private Medicare plan, violate the contracts that were in place when we left, is a disgrace,” reads a statement on the organization’s website.

Opposition caucuses and dissident members within UFT are lambasting the union for its role in the health insurance proposal.

“At a minimum, the argument for collusion between key union leaders and the city is frankly more realistic than the alternative,” reads a post on the New Action caucus blog.

Union activist Jonathan Halabi sees collusion among everyone involved. “I have made the case before: [UFT President Michael] Mulgrew, [Municipal Labor Committee President Harry] Nespoli, [District Council 37 Executive Director Henry] Garrido, the whole MLC, [arbitrator] Martin Scheinman, [Mayor Eric] Adams and the city’s financial administration, starting with the [NYC Office of Labor Relations], plus the insurance companies — they are all working in concert. They are colluding. And they leave the evidence all over the place,” he wrote in a Dec. 15 blog post.

And longtime UFT retiree and gadfly Norm Scott has been covering all aspects of the controversy, blogging out “The Adams/Mulgrew/MLC/OLR/Dracula team have found a flunkie to intro a bill to change the admin code.”

But it isn’t just internal dissidents who are riled up. The Professional Staff Congress, which represents 30,000 faculty and other employees at the City University of New York, is also campaigning hard against the Medicare Advantage plan.

“We believe in the long run, a single-payer health insurance program is necessary, but we also recognize the urgency of the moment and believe that the city must not place the burden of saving $600 million annually on the backs of municipal retirees and their dependents by forcing them into a Medicare Advantage plan or into premiums for opting out,” wrote President James Davis in a Nov. 7 letter to members.

The City Council vote to change the administrative code, and negotiations with Aetna, the insurance company awarded the Medicare Advantage contract, are supposed to take place this month. But the specter of more lawsuits looms over the entire process.

“We will litigate this as long as I’m breathing. And I’m sure if something happens to me, someone else will be litigating it right behind me,” said Marianne Pizzitola, the retirees’ organization president.

It may be a while before this all gets resolved, and while health insurance costs keep piling up, New York City’s taxpayers are on the hook.

Mike Antonucci’s Union Report appears most Wednesdays; see the full archive.

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