Over 50 retired city workers testified in opposition to New York City’s plan to switch retirees to a cost-saving privatized health care plan at a virtual public hearing conducted by telephone on Wednesday. During the sometimes-raucous hearing, retirees spoke about their fears that the privatized plan will bring smaller networks, higher costs, and fewer covered services. Throughout the entire hearing, which lasted more than five hours, not a single retiree testified in favor of the plan.
The purpose of the hearing was to allow public testimony on the city’s plan to switch a quarter-million retired city workers and their dependents off of their current government-administered Medicare plans and into a privately-run system known as Medicare Advantage. The new plan will be run by the “Retiree Health Alliance,” a partnership between for-profit insurance giants EmblemHealth and Empire Blue Cross Blue Shield.
The switch to a privately-run insurance plan is the result of a deal that Mayor Bill de Blasio struck with municipal labor unions to save on spiraling health care costs.
Under the terms of the deal, retired city workers will be automatically switched from the city’s current Medicare plan into the new privately-run plan unless they opt out ahead of time. During a City Council hearing on October 28, an Office of Labor Relations official testified that about 23,000 retirees—8.9 percent of retired workers covered by the city’s health care plan—have so far opted out of the Alliance’s new plan.
Retirees who opt out have the option to pay $191 a month to retain their present coverage, which the city currently provides free of charge.
Implementation of the plan is currently stalled. On October 21, New York Supreme Court judge Lyle Frank issued an injunction indefinitely blocking the plan from taking effect. Frank ordered the city to devise an implementation schedule that provides more information about the plan than retirees currently possess, including which doctors will accept it.
While the city has not yet submitted such a schedule, holding the hearing Wednesday was an indication that the city intends to proceed with the plan.
The hearing was held in accordance with New York City law that all City contracts worth more than $100,000 must be the subject of a public hearing before final approval.
“A Real Shitshow”
The first hour of the hearing, which began at 10 A.M., was tumultuous. Jacqueline Galory, calendar director at the Mayor’s Office of Contract Services, which administered the hearing, noted during the call that over 200 people had called in to testify. The city did not appear to have a plan to deal with all of them.
There was little in the way of moderation, with multiple callers attempting to testify at once and little to no intervention from any of the city officials who were on the call.
“200-plus retirees are on this call today, trying to stop this plan from moving forward, and we are being treated very disrespectfully by the city,” said Martha Bordman, a retired teacher.
“They said they were going to take names at 10 o’clock and never did,” complained another retiree, who did not give her name. “This is total chaos and disgusting.”
“This is New York’s finest,” a third person on the call joked. Another summed up the hearing as “a real shitshow.”
After about an hour of chaos, city officials on the call were able to impose a degree of order and began calling on retirees to testify one by one.
Galory, the city official managing the hearing, said that the issues during the first hour of the call were unusual. “What happened this morning was unfortunate, but it usually doesn’t happen at a regular contract public hearing,” she said nearly two hours into the call.
Steve Cohen, a lawyer who testified on behalf of the NYC Organization of Public Service Retirees, a retiree group currently engaged in a lawsuit attempting to scuttle the plan, told New York Focus that the issues with the hearing were representative of larger problems with the city’s plan.
“The chaos that is dominating this so-called public hearing is disrespectful to the retirees who are understandably anxious about the Medicare Advantage proposal. Sadly, the chaos is indicative of the half-baked proposal itself,” Cohen said.
“Today’s attempt by the Mayor’s office and OLR to hold a public meeting was nothing short of a train wreck,” Marianne Pizzitola, the president of the NYC Organization of Public Service Retirees, added. “There was no order, no control, and the moderator was ill-prepared to manage the callers and establish order so everyone could be heard.”
Higher Costs and Smaller Networks
During the hearing, several retirees complained that by holding the hearing, the City was still attempting to move the plan forward despite the fact that it has not yet complied with Frank’s injunction.
“The hearing should have been postponed until retirees have full and accurate information, and a system of actually listening to retirees figured out,” said Cohen, the retirees’ group’s lawyer.
Multiple retirees also expressed concern that their doctors were unaware of the Alliance’s plan, and thus couldn’t confirm whether or not they will accept it, or whether retirees’ care will be covered.
Teresa Moran, a city retiree living in Bayside, Queens, said that the doctor who administers her post-cancer medication was unaware of the plan.
“When I called my doctor’s office to find out if they would be participating in the new plan, their answer was that they’d only heard about it from patients. No one from the city and no one from the new plan had contacted them,” Moran testified.
Moran also said that when she contacted her cardiologist’s office to ask about the plan, the office recommended that she get her next round of tests before 2022, since they couldn’t say for sure whether or not they would be accepting the Alliance’s plan.
Other retirees reported similar experiences. “I already reached out to my doctors. One doctor knew what the plan was… four of them didn’t know what I was talking about,” recent city retiree Deborah Graham testified.
Several witnesses also noted that the $191 monthly premium to maintain their current coverage is likely to be beyond the reach of many retirees with smaller pensions, potentially creating a two-tiered health system for retirees.
“The implementation of this plan will further increase health disparities within the city. Higher paid retirees will opt out of the plan. Lower wage workers, predominantly women and people of color, will be forced on to [the Alliance’s] Medicare Advantage [plan],” Joel Shufro, whose wife is a retiree from the City’s Health Department, said in his testimony.
James Davis, president of the Professional Staff Congress, the CUNY faculty and staff union, warned in his testimony that the terms of the current contract may allow the Alliance to unilaterally raise costs to the plan’s beneficiaries.
If changes in federal policy reduce the federal government’s financial support for the Alliance’s plan beyond a certain amount specified in the Alliance’s draft contract with the city, the contract allows the Alliance to unilaterally raise the rates that retirees pay, Davis alleged, based on his review of the contract.
When asked by New York Focus if the terms of the contract could permit the Alliance to unilaterally raise costs for retirees, a spokesperson for the Retiree Health Alliance declined to comment.
Diane Archer, president of the informational health site Just Care, said that there is a “reasonable likelihood” of such changes in federal policy, especially since some studies show that the federal government currently reimburses Medicare Advantage at a higher rate than traditional Medicare.
“Retirees easily could face a surprise increase in their costs,” Archer said.
But a spokesperson for City Hall said that any increases in the cost of the Alliance’s plan would be paid by the city, and not passed onto retirees.
“The City’s plan provides additional benefits for retirees while ensuring the long term stability of the system. Changes to Medicare on the federal level would not impact the City’s commitment to retirees to provide a premium free plan,” the spokesperson said.
“New York Should be a Leader”
At the City Council’s October 28 hearing, Office of Labor Relations commissioner Renee Campion asserted that all healthcare providers that retirees currently have access to under their current traditional Medicare will still be accessible under the Alliance’s plan.
In written testimony, Campion asserted that “retirees can go to any doctor that accepts Medicare.”
“It doesn’t matter if that doctor is in the Alliance network or not,” Campion wrote.
But this would be a departure from the rules that generally govern Medicare Advantage plans. According to federal rules, health care providers not contractually obligated by a Medicare Advantage plan “are generally not required to accept the plan and furnish services.”
And indeed, a document prepared by the Alliance acknowledges that some providers may decline to accept payment from the plan. The document promises that such situations will be “rare,” and says that in such a case, retirees will be able to submit their claims to the Alliance for reimbursement.
A spokesperson for the de Blasio administration commented further, saying that, “Unfortunately retirees are hearing a lot of misinformation, but we are confident this custom plan will continue to provide great benefits for our retirees.”
Following the hearing, the City Council’s Committee on Civil Service and Labor issued a report with a non-committal conclusion. “The Committee hopes to learn more about the changes to the municipal retirees’ healthcare plan, and what implications these changes will have on the health coverage of municipal retirees,” the report states.
The council members present at the hearing, I. Daneek Miller (D-Queens), Helen Rosenthal (D-Manhattan), and Farah Louis (D-Brooklyn), did not respond to requests for further comment.
At Wednesday’s hearing, Shufro expressed concern that the effects of New York City’s shift to Medicare Advantage could ripple beyond New York.
“Adoption of this program would have national implications and send a message to other municipalities and private employees that privatization of healthcare is appropriate,” Shufro said. “New York City should be a leader in the demand that healthcare is a public good.”