The health-care benefits PSC members receive are a product of negotiations between the city and a coalition of unions representing city workers called the Municipal Labor Committee (MLC), of which the PSC is a member. The MLC and the city are in the process of deciding between two health insurance groups to provide the city-paid Comprehensive Benefits Plan (CBP) to members of the MLC unions: Aetna and a consortium of Emblem (GHI) and United Healthcare. PSC members should be aware of and ready to take action regarding key aspects of this deal.
SAVING MONEY
The city wants to save money on the price it pays for premiums by restructuring benefits. The big difference between the city and many other large employers is that the MLC has negotiated for the city to pay the entire premium – employees do not pay a co-premium. Other than that, the city does not spend more than many large employers for employee health care.
SOLICITING BIDS
The CBP is a Preferred Provider Organization health benefit plan, currently provided by a consortium of Emblem (GHI) and Empire, which covers about three quarters of active city workers, pre-65 retirees and dependents, roughly 730,000 participants. This is the first serious reconsideration of the CBP health contract in several decades.
The city issued solicited bids from selected insurance companies to set up a new CBP. Implementation of a new plan will not be before July 1, 2024, and likely later. Once a carrier is chosen, a contract will be negotiated for five to seven years. There will be no participant premiums.
The city’s goal is to reduce health- care costs by 10%, or roughly $1 billion. The MLC’s goal is to maintain high-quality, premium-free health care and members’ ability to choose their providers and hospitals. There are some ways in which the city and the MLC intend to accomplish these goals that are good ideas and will benefit members, such as choosing a carrier with a national network of providers, negotiating larger discounts from hospitals, better administration and “performance guarantees” from the insurance companies.
However, there are two potentially concerning ways in which the successful bidder could seek to save money:
- Participants will continue to have a choice of providers and hospitals, but the city and MLC plan for outpatient providers and hospitals to be “tiered.” Some hospitals/providers would charge zero or low deductibles/co-pays, while others would charge mid-level and higher-level deductibles/co-pays.
- The new CBP may reduce participants’ choices by shifting costs to participants, likely through higher co-pays for out-of-network provider visits, higher charges for imaging and/or more pre-authorization requirements.
REVIEW OF PLANS
Except for the foregoing, union representatives to the MLC haven’t yet received information on the pending changes to the CBP. One key feature we will be looking for is a clear, independent appeals process. Another is a comprehensive system of reporting and oversight.
The PSC does not know when the decision on the insurance provider will be announced, but we anticipate it will be soon.
In anticipation of potential changes, PSC has expanded the working group led by PSC President James Davis that has been providing strategic guidance in opposing the city’s effort to force retirees into Medicare Advantage. This working group, including former PSC President Barbara Bowen, former Executive Director Debbie Bell and Baruch College health policy experts Barbara Caress and Karl Kronebusch, is already at work on broader health- care strategy recommendations, including member education.
The PSC’s long-term goal remains single-payer health care. In the meantime, watch your email inbox and the PSC website for information about actions you can take to help avert any reductions to the quality of care or increases in cost to PSC members or other city workers.
Published: December 21, 2023
