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This will not fix NYC's runaway health costs

PSC Will Vote “No” on Medicare Advantage Plan

This plan still represents a major step away from the premium-free public health option that the PSC supports.

What follows is a message that President James Davis sent to the PSC Delegate Assembly on March 5.  Subsequently, on March 9, the Municipal Labor Committee voted to approve a Medicare Advantage contract between NYC and Aetna Healthcare.  Joined by approximately two dozen other unions, THE PSC VOTED “NO.”  But, with a substanial “yes” vote, the Aetna contract was approved.  The message below explains why the PSC voted “NO.”

Dear Delegates,

As you know, the Adams administration (Office of Labor Relations) and the Municipal Labor Committee have been in negotiations with Aetna for a Medicare Advantage plan.

Last Thu, March 2, representatives from Aetna presented an overview of their Medicare Advantage plan to MLC member unions. This morning I received notice of a MLC meeting on Thu, March 9, at which the member unions will be asked to vote to approve the Aetna contract.

I will vote No on behalf of the PSC for several reasons.

  • We have not seen the contract, only summaries of its elements – which I’ve attached here. As we found the last time with the “Alliance” MA contract, the devil is in the details. It’s unfair to ask the member unions of the MLC to approve a contract without an opportunity to review it fully.
  • Even a much-improved Medicare Advantage plan – and the Aetna plan appears to be far better than the “Alliance” plan – still represents a major step away from the premium-free public health option that the PSC supports. Aetna promises minimal pre-authorizations and co-pays, minimal disruption in terms of the health care providers who will accept it, access to hospitals such as MSKCC and Hospital for Special Surgery, and other benefits. Nevertheless, the push toward privately administered health insurance is antithetical to our union’s stated commitments. The fact that nearly half of retirees in the US are now enrolled in a Medicare Advantage plan of some kind rather than traditional Medicare does not mean we should advocate for Medicare Advantage.
  • No Medicare Advantage plan will save New York City the kind of money needed to genuinely fix the problem of runaway health costs because retiree health benefits are a relatively small piece of the puzzle. The $600 million in annual savings that this Medicare Advantage plan is supposed to achieve for the City will shore up the Health Insurance Stabilization Fund only short-term. The real leverage that the City has to drive down skyrocketing health costs – using its 1+ billion covered lives to negotiate better terms with hospitals and prescription drug companies – will not have been used.

There are other union representatives who will vote No. But there are probably enough Yes votes for the contract with Aetna to be approved. So I have been discussing with other MLC union representatives and with PSC leaders, including the Social Safety Net working group, how premium-free Senior Care could be preserved once the Adams administration moves to implement Aetna Medicare Advantage. To be clear, eliminating an option for Senior Care is the City’s explicit intention.

The implementation of Medicare Advantage for NYC retirees and their dependents is very likely, but it is still not a foregone conclusion. If premium-free Senior Care is slated for elimination during the MA implementation, the same group of municipal retirees that sued previously may well file another lawsuit.

We are now asking retirees and active members to contact their City Council members to join a sign-on letter to Mayor Adams. Based on our proposal, the letter urges the Mayor to preserve premium-free Senior Care, form a stakeholders commission, and buy time – using the City’s current budget surplus – for the commission to address the true causes of the rising cost of healthcare for NYC, as other states and municipalities around the country have done. As well, the NYC Office of Contract Services will need to hold a public hearing, as was held in Fall 2021 when the previous MA contract was under consideration.

You should also be aware that the City is entering into negotiations for a new Comprehensive Benefits Plan (CBP) to replace GHI, the plan in which most of PSC’s active employees are enrolled, starting in 2024. The intent is to keep the CBP premium-free while saving 10% on the current costs. MLC union representatives have not seen the proposals, but they are under review by the MLC executive committee and health technical committee.

I will continue to keep you updated on developments and notify you of any actions in which the PSC is participating. Thank you in particular to the Retiree chapter leadership and the Social Safety Net working group for their vigilance, and to all members who have recognized the importance of this struggle for current and future retirees.

In solidarity,

James Davis


Published: March 7, 2023 | Last Modified: March 9, 2023

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