Since the mid-1960s, when Medicare became available, the city has provided its retired workers with a free supplement to fill the remaining 20% gap in Medicare coverage.
Two years ago, with the support of his employee union leaders, he declared his intention to move these retirees from public Medicare to a private Medicare Advantage plan, unless they opted out and agreed to pay nearly $200 per month for the Medicare supplement. known as SeniorCare.
Now, after multiple lawsuits and two years of political debate, marches and protests, the city and union leaders are about to agree to a plan that will be much tougher and more expensive for their retired workers.
When the city and the leaders of the main unions in the city issued their initial plan, reclaimed, falsely, that the federal government would make up for what the city was not spending. They claimed, and continue to claim, that the private Medicare Advantage plan will be as good as what retirees have now. That claim was false then, and it’s even less true today. The city was paying 20% of the cost. Those funds are lacking in Medicare Advantage plans, and the federal government provides them with a supplement that today barely reaches 2%.
In 2021, then-candidate Eric Adams condemned the city’s plan, declaring it a “bait-and-switch,” luring workers in with the promise of good benefits for average wages, then withdrawing those benefits when they were most needed.
Today, as mayor, Adams is implementing that “switch” from steroids. The plan that the unions are about to vote on would not only require city retirees, if they want to stay on Medicare, to buy their own supplemental plan; it would require them to give up all other city health benefits. They would no longer be reimbursed by the city for their Medicare Part B (medical care) premiums, nor would they be eligible for the city’s drug benefits.
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The cost for each retiree would be $5,000 or more each year. No wonder retirees refer to this as the “nuclear option.” Most retired workers could not afford this and would be forced to participate in Aetna’s Medicare Advantage plan. The poorest among them, often black and brown, would be hardest hit.
Retirees with Medicare have coverage administered by a Federal agency whose mission is to provide access to health care for seniors. Medicare Advantage, by contrast, is private insurance. Although the federal government pays for it, the mission of any private insurer is to make money for its shareholders. Every dollar spent on healthcare is a dollar not going to shareholders.
Retirees currently receive first class care under Medicare. Under the city’s new plan, retired city workers will be relegated to second-class care at cut prices. Without the supplemental pay from the city and with the added cost of executive salaries and corporate profits, a Medicare Advantage plan has 25% less to spend on health.
Medicare Advantage plans save money by imposing a variety of measures that limit your spending. They require ubiquitous copays that not only pass the cost on to members, but also discourage them from seeking care. They limit the choice of doctors and hospitals. And unlike Medicare, they require prior authorization from the insurer for any treatment or procedure that could be expensive. The resulting delays and denials can be deadly for patients.
New York City, which claims to be a world leader in trade and social policy, is unwilling to learn from countries around the world that have found they cannot turn their health care system over to private insurance companies and hope to achieve affordable and high quality. . Authoritarian comparisons Systems worldwide show that ours is the most expensive and least effective among all leading countries, yet this city and its unions want to move from cashless public Medicare to expensive and inefficient private insurance model.
There are solutions that won’t cost the city any money in the short term and would save big in the long run. The union representing CUNY faculty and senior staff has proposed using excess reserve funds to pay for the current retiree benefit while organizing a task force to find ways to contain future health care costs. In the meantime, the City Council should direct the mayor’s administration to continue the current benefit with public Medicare and the city-funded supplement. That’s the fairest way to honor the commitment the city has made to its dedicated workforce. City workers deserve the best.
Rodberg is emeritus professor of urban studies at Queens College/CUNY. He taught health policy and other topics until his retirement in 2017.