“It really takes away choice,” said Marilyn Moon, an economist and a former trustee of both Social Security and Medicare. “The whole idea of Medicare Advantage was supposed to be to give people more choice, not less.”
Seeking cost savings
Medicare Advantage offers employers an opportunity to reduce costs substantially. They and unions traditionally have provided a retiree health benefit that fills the gaps in traditional Medicare by paying for deductibles and co-pays, and by providing other benefits. When an employer contracts with a Medicare Advantage insurer, retirees get all of their benefits, including their Medicare-covered benefits, from this Medicare Advantage plan.
In New York City, labor unions representing retirees have been working with the city on its planned shift to Advantage. They promoted the projected savings and their ability to use their bargaining clout to negotiate for far more generous features than those in plans available for individual purchase.
“When we looked at this, we saw that we could design our own plan that would get the same benefits and even more for our retirees,” said Michael Mulgrew, president of the United Federation of Teachers, the city teachers’ union. “One of our greatest assets is the ability to use our buying power to get that done and, more importantly, to set up an accountability system and a contract where we’re holding the provider to every single word in our contract.”
As the plan was originally envisioned in 2018, retirees who wanted to stay on traditional Medicare could do so if they paid an estimated $191 per month to cover its higher cost to the city. But a grass-roots group founded in 2021, the NYC Organization of Public Service Retirees, sued over the plan, taking its battle to the City Council and organizing through Facebook, YouTube and email.
On Thursday, the Municipal Labor Committee, which represents the city’s 102 unions, approved the latest plan to offer only Medicare Advantage starting this September.
In a statement on Thursday, Mayor Eric Adams said the new arrangement “improves upon retirees’ current plans,” and includes a lower deductible, a cap on out-of-pocket expenses, and new benefits. “We also heard the concerns of retirees and worked to significantly limit the number of procedures subject to prior authorization under this plan,” Mr. Adams said. “This Medicare Advantage Plan is in the best interests of retirees and taxpayers.”