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Home » Clarion » 2022 » April 2022 » Judge: retirees do not have to pay premiums

Judge: retirees do not have to pay premiums

PSC fights privatization of health benefits

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City Comptroller Brad Lander (right) urged Mayor Eric Adams (left) to withdraw the contract.
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In a win for the PSC and other municipal retirees, a New York Supreme Court judge has allowed retirees to stay on their current supplemental Medicare plan (GHI Senior Care for most retirees) at no cost, thus striking the $200 monthly premium when they previously paid nothing.

The decision by New York State Supreme Court Judge Lyle Frank comes after a months long battle between municipal retirees, who have been protesting the move to the privatized municipal retiree health insurance, Medicare Advantage Plus plan (MA+). Retiree activists argued that the switch to MA+ could lead to higher costs, smaller networks and an inability to access current providers, according to the nonprofit news website The City.

A LEGAL WIN

“It’s absolutely a victory if it stands and it’s really the result of significant pushback, not simply by PSC retirees, but municipal retirees across the city,” PSC Retirees Chapter Chair Bill Friedheim told Clarion. “It’s astonishing given the forces arrayed against us: two powerful health-care organizations that had the Medicare Advantage Plus contract, the Municipal Labor Committee and the City of New York’s Office of Labor Relations – and all their lawyers.”

The city has filed a notice to appeal the judge’s ruling, and the organization that brought the lawsuit on behalf of retirees has filed a notice of counter appeal.

As a result of the judge’s March 3 ruling, the NYC Office of Labor Relations has stated on its website that the new MA+ plan will not be implemented on April 1 and that the opt-out deadline is no longer in effect.

The latest legal win comes after persistent activism by members in the PSC Retirees Chapter, including rallies, testimony to city officials, pleas to the city council, mayor and the New York City comptroller and support for the lawsuit brought against the city, protesting the implementation of the MA+ plan. Some recent PSC Retirees Chapter meetings have engaged over 600 members.

Following the court ruling and a meeting with PSC representatives to discuss flaws in the proposed contract between the city and the “Alliance” of health insurance companies that administer the MA+ plan, newly elected City Comptroller Brad Lander wrote a letter to Mayor Eric Adams, stating that in light of the recent court decision, “We ask that the Office of Labor Relations strongly consider withdrawing its contract.”

AN ‘INFERIOR’ PLAN

The court case was filed by the NYC Organization of Public Service Retirees in September 2021 on behalf of a group of municipal retirees who contested the switch from their premium-free retiree health care benefits, which is a traditional Medicare plan with supplemental coverage paid for by the city, to what the petitioners called a “materially inferior Medicare Advantage Plan.”

The decision to switch to the MA+ plan was the result of a 2018 New York City and Municipal Labor Committee (MLC) agreement aimed at protecting the Stabilization Fund, which pays for, among other things, PSC-CUNY Welfare Fund benefits. The agreement looked to find “savings” to mitigate skyrocketing health-care costs. However, switching to a private Medicare Advantage program for retirees was only one of eight options the parties agreed to consider in the 2018 agreement. As a member union of the MLC, the PSC has opposed the privatization of retiree Medicare from the beginning and is encouraging the MLC to look at some of the other options for health-care cost savings, such as self-insurance, cooperative prescription drug purchasing and reductions in hospitalization costs. Ultimately, the PSC believes that the long-term answer to out-of-control health-care costs is national single-payer health care.

NO PREMIUMS

The MA+ plan would be run by an “Alliance” of private health insurers, EmblemHealth and Empire BlueCross BlueShield. Before the judge’s latest order, retirees would have had to opt out of the MA+ plan and pay a $191 per month premium if they elected to stay on GHI, which is the primary supplementary health insurer for most municipal retirees. (Clarion has extensively covered the developing story in recent issues.)

If the judge’s ruling stands, retirees will not have to pay premiums in order to stay on their current plan, up to a certain cap. (The current GHI premium of $191.57 per month is nowhere near the current monthly cap, which is over $750.) If the judge’s ruling is upheld on appeal, retirees will have three months after the MA+ implementation date to move back to their previous plan. Also under the judge’s current ruling, the city can decide not to offer the GHI Senior Care as an option to municipal retirees.

LEGAL DEVELOPMENTS

The union and the PSC Retirees Chapter are monitoring developments in the case and will respond accordingly.

PSC President James Davis said in an email to members, “Although the outcome is still unclear, I would like to congratulate all PSC retirees and extend thanks to our Retirees Chapter for their persistent advocacy, which was essential in bringing us to this point.”

To find out the latest developments in retiree health care, go to www.psc-cuny.org/whats-happening-retiree-healthcare.


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