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The city’s oft-stalled intention to switch roughly 250,000 retired municipal workers to a private Medicare provider from their traditional Medicare plan will go ahead without affording the retirees an option to keep a popular health program.
A late January deadline for the City Council to pass legislation that would have allowed the city to charge retirees for the Senior Care “Medigap” option passed without action by that body, despite a nearly 11-hour hearing of the Civil Service and Labor Committee Jan. 9 dedicated to the issue and a concerted push by the Eric Adams administration.
Barring contractual snags or a successful court challenge, the switch is scheduled for July at the latest, according to a timeline set in mid-December by Martin Scheinman, the chairperson of a committee tasked with addressing the delivery of health care to municipal workers and retirees.
“The administration is committed to offering quality and sustainable care for our retirees. The city and the Municipal Labor Committee worked together to take advantage of the federal funding for Medicare Advantage plans that would permit us to continue providing high-quality, premium free coverage for retirees while saving approximately $600 million a year — savings that are especially critical as we continue to face a skyrocketing health care crisis and other fiscal challenges,” an administration spokesman, Jonah Allon, said in an email.
Successive mayoral administrations have pushed for the switch, which is sanctioned by the majority of municipal unions but vehemently opposed by retiree groups who have argued that private, for-profit Medicare coverage is by definition inferior to traditional government-run Medicare.
The savings, in the form of federal subsidies, would be funneled into the city’s Joint Health Insurance Premium Stabilization Fund, which helps finance unions’ welfare fund benefits, among other purposes.
Scheinman gave the Council until Jan. 29 to amend the administrative code. If it did not, Senior Care will “no longer be an offering,” he wrote in mid-December.
The Council, though, declined to act, with Speaker Adrienne Adams and others noting during the committee hearing that they lacked sufficient information, notably the Medicare Advantage contract between the city and managed-health-care company Aetna.
‘Every option on the table’
The committee hearing was the first and so far only time the current Council has contended with the politically fraught issue. And while it is unclear to what extent the lawmakers could legislate on the issue, the speaker said “conversations” on the matter were ongoing.
“We’re very sensitive to this issue and it took us a while to get here,” she said prior to the full Council’s Jan. 19 meeting. “We want to do right by the current municipal employees and the retirees, so every option is still on the table.”
Among those options would be one proposed by the Professional Staff Congress/CUNY, which would call for the city to allot $500 million into the city’s stabilization fund from its Retiree Health Benefits Trust in each of the next three fiscal years. It would also convene a stakeholders commission that would identify long-term health-care savings, focusing chiefly on hospital costs, which the union’s president, James Davis, said run into the billions of dollars.
“We wanted to find a third way … or to let the Council and labor leaders find another way to get outside of the box,” Davis said during a phone interview earlier this week.
He said talks with some Council members on the PSC’s proposal began months ago, with a number of the lawmakers receptive. “I think many members of the Council are interested in trying to find an alternative to the kind of binary choice that's on the table right now," he said.
Davis was among just 11 union heads to vote against a Municipal Labor Committee resolution supporting the code amendment. He also spoke out against the amendment at the committee hearing, saying that “it would open the door to lesser plans being negotiated for classes or subgroups of employees.”
He also pushed back on claims by the Adams administration and the majority of MLC unions that the amendment would preserve choice, given the estimated $200 monthly cost — which amendment opponents called pricey and even prohibitive for some retirees.
Davis said the administration has so far not shown much enthusiasm for the PSC plan, given, he surmised, that it would call for the city to dip into a fiscal reserves pot. City Hall did not respond to a query about the plan. Adams, the Council speaker, and Carmen De La Rosa, Labor Committee chair, both declined to comment on the PSC proposal.
Davis, though, remained hopeful that the city and relevant participants can carve out a solution to mounting health care costs without financially burdening either current municipal employees or retirees.
“If the city and the labor unions and other stakeholders could come together and figure out a way to drive down those skyrocketing hospital costs, then it wouldn't be as urgent to try to extract health care savings from municipal employees or retirees,” he said. “But that takes a lot of time. That's why what we're proposing is to free up some time for that work to be done.”
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The Scheinman document is a recommendation and is not arbitration decision.
Both the City and MLC are in agreement of forcing NYC Retirees into a Medicare DIS-advantage plan.
Wednesday, February 1 Report this
all the city wants to save money on the backs of all the NYC retires if it happens they will go after the active employees next
Wednesday, February 1 Report this
Read the following if you think the City can't afford traditional Medicare:
The 403(b) plan (TDA) of the Teachers’ Retirement System of the City of New York is a voluntary Defined Contribution retirement savings plan. One investment option gives the TDA participant the opportunity to lend his/her TDA savings to the city at a guaranteed interest rate of 7% for teachers or 8.25% for supervisors/administrators. For the last fiscal year the city made $2.1 billion in TDA interest payments. This is stunning inasmuch as the city can borrow money at about 2-3%.
The participant funds his/her TDA savings on a pre-tax basis which means TDA withdrawals are subject to the personal income. The State, however, treats the TDA as a “pension plan” which, clearly, it’s not. This treatment makes TDA withdrawals exempt from the State’s personal income tax. Every dollar going in is tax-deferred while every dollar coming out is tax-exempt. This is utter nonsense.
Publication 36 (3/2015) of the New York State Department of Taxation and Finance provides a list of public employee pension plans that are exempt from the State’s personal income tax. The TDA plan of the Teachers’ Retirement System of the City of New York is on the list. See page 12. The 403(b) plan of the Teachers’ Retirement System is the only voluntary Defined Contribution savings plan that is exempt from the State’s personal income tax. Why?
Thursday, February 2 Report this
I have a stupid idea: why don’t we have one health care fund for all NY State municipal workers ? Now isn’t that the dumbest thing u heard?
Monday, February 6 Report this