City officials on Thursday inked a five-year contract with the insurance giant Aetna that paves the way to switch the city’s 250,000 retired employees to a privately run Medicare Advantage plan.
The Aetna deal is key to locking in an estimated $600 million in annual savings agreed to by municipal unions to help pay for wage boosts and benefits. It’s been met with opposition from retirees, who vow to challenge the switch in court.
Many retirees fear that the long-planned switch from traditional Medicare to the privately run Medicare Advantage could increase their health care costs and make it more difficult to get approvals for procedures.
“Our administration has never wavered in our commitment to provide retirees and their dependents with high-quality, sustainable coverage while allowing us to rein in the skyrocketing costs of health care and the strain it is placing on our city’s budget,” Adams said in a statement Thursday. “This Medicare Advantage plan is in the best interests of both our city’s retirees and its taxpayers.”
The Municipal Labor Committee, a consortium of 102 public sector unions, voted on March 9 to back the plan with Aetna. In a statement Thursday, MLC Chair Harry Nespoli stood by the switch. “With today’s City Hall announcement, our retired city employees will retain high-quality, premium-free healthcare in a unique Medicare Advantage plan designed to meet their needs,” Nespoli said.
He also sought to assure members and retirees that the new Aetna plan will provide high-quality coverage. “The MLC fought hard to dramatically reduce the use of prior authorizations and to make sure that the doctors our members now use are covered by the plan,” he said. “The MLC will remain at the table to ensure that the plan is implemented as written and to enforce the safeguards that we helped negotiate.”
Retirees successfully sued to block a previous version of the plan last year, and a judge barred the city’s alternative offer, under which retirees would have been allowed to keep their existing Medicare with Medigap health plan — if they paid $191 a month.
Marianne Pizzitola, an FDNY retiree and president of the NYC Organization of Public Service retirees, the group behind last year’s lawsuit, reiterated past vows to sue over Adams’ refusal to allow retirees to stay in their existing Medicare plan without having to pay toward premiums. “We consider it a betrayal and we are going to pursue litigation against this,” Pizzitola said. “With just a careless stroke of his pen, our rights are just being stripped away from us.”
The $600 Million Question
When the Aetna plan goes into effect on Sept. 1, retirees currently enrolled in the city’s Senior Care plan will automatically be enrolled in Medicare Advantage. Medicare-eligible retirees and their dependents will also be able to opt out of the Aetna Medicare Advantage plan and enroll in the city’s HIP VIP Plan instead, the Mayor’s office said in a statement on Thursday.
The city’s Aetna Medicare Advantage plan will provide a lower deductible for retirees than their current Senior Care plan and “significantly limits” the number of procedures requiring prior authorization, according to that same statement.
At a hearing last week on the Aetna contract, dozens of retirees called in to urge the city Office of Labor Relations to consider using an alternative implementation framework known as “Schedule C” that would allow retirees to stay on traditional Medicare at no extra cost.
Adams quickly nixed that option, because it would undermine the plan’s cost-saving goals, mayoral spokesperson Charles Lutvak told the Daily News at the time.