Leaders of the city’s public sector unions agreed on Thursday to approve a cost-saving Medicare Advantage retiree health care plan managed by Aetna, a move that is all but certain to face legal challenges by groups representing retired workers.
The Municipal Labor Committee, a consortium of 102 public sector unions, approved the plan by 79%, with 26 unions voting against. The vote opens the door for the plan to go through a contract process with City Hall before it goes into effect, with an expected Sep. 1 launch.
The plan was heavily pushed by District Council 37 and the United Federation of Teachers, which jointly represent 60% of the city’s workforce. Due to the committee’s weighted vote structure, where each union gets one vote per 250 members, those two unions alone have the clout to sway decisions.
“Aetna’s much-improved Medicare Advantage proposal, with new guarantees about prior authorization of services and enhanced other benefits, has been approved overwhelmingly by the Municipal Labor Committee,” UFT president and Municipal Labor Committee vice-chair Michael Mulgrew said in a statement.
“The plan is designed to provide high-quality, premium-free health care. We will continue to monitor its implementation to ensure that Aetna meets its obligations to our retirees.”
A spokesperson for DC37 did not immediately respond to a request for comment.
The controversial, public-private insurance shift stands to save the city an estimated $600 million a year and help pay for current workers’ wages and benefits — but many retirees fear that it could increase their health care costs and make it more difficult to get approvals for procedures.
Fight Looming (Again)
Groups representing the city’s 250,000 municipal-work retirees are already teeing up potential legal challenges. Last year, they successfully sued to block the deal, and a judge barred the city’s offered alternative coverage, under which retirees would have been allowed to keep their existing health plan — if they paid $191 a month.
Amid the uproar, the City Council declined to pick up legislation pressed by Mayor Eric Adams that would have allowed retirees to pay for and keep their current coverage.
The switch to Medicare Advantage had its roots in the labor deals struck by former Mayor Bill de Blasio, which included commitments of billions of dollars in health care savings to help fund raises and benefits.
On Thursday, dozens of retirees bearing merch from DC37, the UFT and other unions gathered at City Hall to protest the plan, which could increase their health care costs for what they say will be inferior coverage.
“We will keep fighting, and we will never stop until we get the traditional Medicare with our Medigap plan that we have always had, we were promised, we worked for, and that we deserve,” UFT retiree activist Sarah Shapiro said, adding that she expects “ongoing litigation” over the health care switch.
“This fight may take a long time, but we can never stop until we win,” she said to cheers.
Even current city workers are growing in opposition: Rank and file United Federation of Teachers members are having conversations about launching a “vote no” campaign on a pending tentative contract agreement in protest of the Medicare Advantage switch, according to a source familiar with those talks who spoke under condition of anonymity.
Meanwhile, UFT activists are preparing a petition to force a referendum vote on the retiree health care plan, and to make sure that the upcoming health care plan for active city workers that will replace GHI has a premium-free option, said Daniel Alicea, a special education teacher and lead organizer of Educators of NYC, an opposition group within the union.
In a statement Thursday, Adams said that his administration “heard the concerns of retirees and worked to significantly limit the number of procedures subject to prior authorization under this plan,” adding that it would “communicate” details in the coming days.
“The plan approved by the MLC today improves upon retirees’ current plans, including a lower deductible, a cap on out-of-pocket expenses, and new benefits, like transportation, fitness programs, and wellness incentives,” he said. “This Medicare Advantage Plan is in the best interests of retirees and taxpayers. We thank the MLC for their steadfast partnership throughout this process.”
It was widely believed that the health care limbo was stalling contract talks for the city’s public sector workers, most of whom are working under collective bargaining agreements that expired in the last two years.