tag:blogger.com,1999:blog-36397762054708384842024-02-15T23:34:42.298-05:00NYCERS Info - John Murphyjjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.comBlogger298125tag:blogger.com,1999:blog-3639776205470838484.post-57197374972163474292023-12-30T13:15:00.002-05:002024-01-02T10:25:22.259-05:00In Plain Sight - Growing Risk Level in NYCERS Investments and Runaway Fees.<script type="text/javascript">
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<p>
<h3 style = "color:red">Runaway Investments fees</h3>
<p>
In FY-2000 NYCERS paid $37.4 million in investment fees for an asset base of $42.8 billion.
<p>
In FY-2023 NYCERS paid $489.9 million in investment fees for an asset base of $82.4 billion.
<p>
The numbers speak for themselves. There is no benefit to these radically increased fees. Clearly, twice the $37.4 million in fees from FY2000 could cover the $82.4 billion in assets for FY-2023. But the current trustees have no idea what was going on in 2000.
<p>
This is a big part of the income inequality in America. This story is not just about NYCERS but every public pension plan in America.
<h3 style = "color:red">Increasing Investment Risk</h3>
<p>
In a prior <a href="https://nycers-info-murphy.blogspot.com/2020/01/sunshine-and-gasb-72.html">post</a> from January 2020, I outlined a new accounting reporting requirement for government pension plans (GASB 72) mandating that plans report a breakdown of the reliability of the reported value of the plan's investments. The assets are broken down into 3 levels as listed below:
<ul>
<li>Level-1 assets - open market - very liquid
<li>Level-2 assets - open market - not as liquid
<li>Level- 3 and NAV assets - no open market - not liquid
</ul>
<p>In addition to these crazy fees noted above, the risky Level-3 assets at NYCERS have grown steadily since 2015. On top of this growth in risky assets, this year there was a law passed in Albany to raise the limit (from 25% to 35%) on the amount of Level 3 and NAV assets in a NYS public pension plan.
<p>In the table below you will see the growth for Level-3 and NAV class assets at NYCERS.
<p>
<blockquote>
Note: As of FY-2023 NYCERS is relabeling alternative investments as net asset value items rather than Level 3 as a "practical expedient". This is a PR sleight of hand. Nobody wants to be called Level-3. "NAV" is a lot more vague. $19.8 billion (25% of the portfolio) for Level-3 and NAV assets is an obvious red flag for the risk level of the portfolio. You can be sure that $19.8B is the upper bound for this class and that a 50% reduction is a real possibility.
</blockquote>
<p>
<table border="2" width = "70%">
<caption>Ranking of NYCERS Assets via GASB 72</caption>
<colgroup align= "center" span="1" width = "10%">
</colgroup>
<colgroup align = "right" width = "15%" span="1">
</colgroup>
<colgroup align = "right" width = "15%" span="1">
</colgroup>
<colgroup align = "right" width = "15%" span="4">
</colgroup>
<thead>
<tr>
<td>Fiscal Year</td>
<td>Level-1 Assets (in thousands)</td>
<td>Level-2 Assets</td>
<td>Level-3 Assets</td>
<td>Assets at Net Asset Value</td>
<td>Total</td>
</tr>
</thead>
<tbody>
<tr>
<td>FY-2014
<td style="text-align:right">$27,028,432
<td style="text-align:right">$17,437,139
<td style="text-align:right">$10,642,729
<td style="text-align:right">$0
<td style="text-align:right">$55,108,300
<tr>
<td>FY-2015
<td style="text-align:right">$27,707,076
<td style="text-align:right">$17,175,757
<td style="text-align:right">$10,796,968
<td style="text-align:right">$0
<td style="text-align:right">$55,679,801
<tr>
<td>FY-2016
<td style="text-align:right">$27,330,534
<td style="text-align:right">$15,924,399
<td style="text-align:right">$10,377,791
<td style="text-align:right">$1,123,861
<td style="text-align:right">$54,756,585
<tr>
<td>FY-2017
<td style="text-align:right">$32,312,375
<td style="text-align:right">$17,461,428
<td style="text-align:right">$10,914,801
<td style="text-align:right">$95,987
<td style="text-align:right">$60,784,591
<tr>
<td>FY-2018
<td style="text-align:right">$31,219,885
<td style="text-align:right">$23,282,843
<td style="text-align:right">$10,880,803
<td style="text-align:right">$66,675
<td style="text-align:right">$65,450,206
<tr>
<td>FY-2019
<td style="text-align:right">$34,128,310
<td style="text-align:right">$22,782,825
<td style="text-align:right">$11,534,369
<td style="text-align:right">$6,979
<td style="text-align:right">$68,452,483
<tr>
<td>FY-2020
<td style="text-align:right">$33,647,567
<td style="text-align:right">$24,941,479
<td style="text-align:right">$11,856,921
<td style="text-align:right">$3,735
<td style="text-align:right">$70,449,703
<tr>
<td>FY-2021
<td style="text-align:right">$42,162,979
<td style="text-align:right">$30,981,818
<td style="text-align:right">$14,845,548
<td style="text-align:right">$1,240
<td style="text-align:right">$88,091,585
<tr>
<td>FY-2022
<td style="text-align:right">$32,892,068
<td style="text-align:right">$26,386,373
<td style="text-align:right">$18,726,172
<td style="text-align:right">$1,129
<td style="text-align:right">$78,005,742
<tr>
<td>FY-2023
<td style="text-align:right">$35,986,966
<td style="text-align:right">$25,235,457
<td style="text-align:right">$461,156
<td style="text-align:right">$19,845,541
<td style="text-align:right">$81,529.120
</tbody>
</table>
<p>
<h3 style = "color:red">Investment Expenses for the Assets by Quality for FY-2023</h3>
<p>
In FY-2023 NYCERS paid the following investment management fees for the different levels:
<ol>
<li>
$54.7M for Level 1 assets (FY-2019 fees = $39.7M).
<li>
$25.0M for Level 2 assets (FY-2019 fees = $18.4M)
<li>
$375.0M for Level 3 and NAV assets (FY-2019 fees = $140.5M)
</ol>
<p>
Again, the numbers speak for themselves. The trustees are being rolled big time - everywhere.jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-37529634341765959202023-12-08T19:16:00.005-05:002023-12-10T22:04:16.161-05:00How to Do Investment Fees the Right Way - TRS and Its TDA Fund<p>
TRS is one one the five NYC pension funds, the one that covers NYC teachers. Actually TRS is two funds, a defined benefit fund (DB) and a defined contribution fund (DC). TRS calls its DC fund the TDA Program. The TDA program is funded by payroll deductions (approximately $1.0B/year) from the teachers. This fund is teachers' money, not tax payers' money. Well not really. The DB fund guareantees a 8.25% and 7% rate of return on fixed income assests in the TDA fund. But that is another story for another day.
<p>
The following list is the closing balances of the two funds as of June 30th of following years:
<ul>
<li>Year - DB Fund - TDA Fund
<li>2020 -- $59.3B -- $37.0B
<li>2021 -- $78.3B -- $43.0B
<li>2022 -- $64.0B -- $42.2B
<li>2023 -- $67.9B -- $45.4B
</ul>
<p>
You can see from the numbers that the TDA fund runs a tighter ship than the DB fund. The TDA fund grew by 22.7% over the three years while the DB fund only grew by 14.5%.
Eeven though the TDA rate of return is is impressive compared to the DC fund, what rally is superhuman is the investment fees that the TDA fund pays versus the DC fund. See the fees for the two funds over the four years listed below:
<ul>
<li>Years - DB Fund - TDA Fund
<li>2020 -- $290.8M -- $0.6M
<li>2021 -- $405.7M -- $13.7M
<li>2022 -- $535.3M -- $24.2M
<li>2023 -- $518.9M -- $11.2M
</ul>
<p>
How does the TDA spend so little on fees and does so much better that the DB fund???
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com04VM2CQH9+3H-36.572367799999988 160.7689743-64.882601636178833 125.6127243 -8.2621339638211424 -164.07477570000003tag:blogger.com,1999:blog-3639776205470838484.post-38449949177537067912023-09-26T12:04:00.060-04:002023-10-07T11:52:39.156-04:00Harry Nespoli Fails to File a Final Appeal to Protect the Pension Rights of His Union Members<script type="text/javascript">
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<p>
In January 2017, I wrote a <a href="http://nycers-info-murphy.blogspot.com/2017/01/tier-4-sanitation-workers-being-forced.html">post</a> about how NYCERS was stripping pension rights from Tier 4 members who became sanitation workers after 4/1/2012 based falsely on the new Tier 6 law.
<p>
<b>To make this issue simple, Tier 6 does not force Tier 4 members into Tier 6-3 just because the member becomes a sanitation worker and even if it did, it would be unconstitutional.</b>
<p>
In November 2016, four and a half years after the passage of Tier 6 NYCERS changed its previous position on this issue and began sending notices to certain Tier 4 sanitation workers that their Tier 4 Sanitation benefits were being revoked and they were being forced into Tier 6-3 Sanitation benefits.
<p>
On 11/15/2016 Harry Nespoli filed a complaint in court against the NYCERS Board of Trustees attempting to reverse this blatant attack on his union members' pension rights.
<h3>NYCERS Board of Trustees</h3>
<p>
There are three votes out of seven on the NYCERS Board of Trustees controlled by the three largest city unions. Nespoli was and continues to be head of the MLC, the organization representing all city unions. It is not clear whether Nespoli spoke to the three union reps on the Board of Trustees about this issue. There should have been a full debate about this issue at a board meeting. This would have been the best way of handling this issue and preventing unnecessary litigation.
<h3>The Six Other NYS Pension Systems</h3>
<p>
In addition, there are implications of this issue for the other six NYS pension systems.
<p>
For instance, I have a strong suspicion that<br>
a 2008 Tier 4 NYCERS member who joined NYPD in 2013 is covered by Tier 2 police pension benefits and <br>
a 2011 Tier 4 NYCERS member who joined NYPD in 2013 is covered by Tier 3 pre-Tier 6 pension benefits.<br>
<p>
This is counter to the NYCERS position.
<h3>Trial Court</h3>
<p>
Four and a half years later, on 6/10/2021, the trial court reached a court decision on this issue. The trail court incorrectly
<a href="https://nycers-info-murphy.blogspot.com/2021/05/nespoli-case-trial-court-decision-tier.html">decided</a> that NYCERS was an expert on pension law and confirmed its unfounded actions.
<p>Nespoli appealed the trial decision.
<h3>First Department</h3>
<p>
On 5/5/2022 the First Department Appellate Court upheld (case # 02096-2021) the incorrect trial court decision. It discarded the constitutional pension protection clause with only the following statement which is, on its face, factually incorrect.
<p>
<blockquote>Petitioners’ reclassification did not violate the New York State Constitution (NY Const art V, § 7[a]), since “petitioners were never entitled to [SA]-20 benefits to begin with and, thus, did not have a contractual right to those benefits” (Matter of Ly, 189 AD3d at 1413). </blockquote>
<p>
In fact, on March 30, 2012, every Tier 4 NYCERS member was eligible to be covered by the SA-20 plan if he or she became part of the Uniform Sanitation Force. The court is saying they did not, in complete denial of reality. What we have here is a blind umpire.
<p>
On April 1, 2012, Tier 6 can not take away a pension right that existed on March 30, 2012, the day before. The scary thing about this decision is that there is no rational argument supporting it.
<h3>Court of Appeals</h3>
<p>
There is no record on the court website that Nespoli filed an appeal to the NY Court of Appeals. This is a constitutional issue and there are impacts for the other six NYS pension systems. It is clear that this issue should have been taken to the Court of Appeals.
<p>
Of course, this was the same time that the City and the MLC were busy trying to deprive city retirees of their Medicare supplemental health insurance benefits in order funnel the money saved into union welfare funds.
<h3>NYS Constitution</h3>
<p>
The following is the text from the N.Y. Constitution Article V, § 7:
<blockquote>
"The rights of public employees are thus fixed as of the time the employee becomes a member of the system. We have consistently held that the constitutional prohibition against diminishing or impairing retirement benefits prohibits official action during a public employment membership in a retirement system which adversely affects the amount of the retirement benefits payable to the members on retirement under laws and conditions existing at the time of entrance into retirement system membership. "</blockquote>Ijjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-39407917054466962712023-09-16T10:41:00.006-04:002023-09-19T14:04:09.094-04:00Is a New IT System Worth $487M?<script type="text/javascript">
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<p>
In the spring of 2015, NYCERS initiated a five year <a href="https://nycers-info-murphy.blogspot.com/2015/05/budget-insanity-at-nycers.html">project</a> (LRP) to modernize its IT systems. It was supposed to cost $132M and take five years.
</p>
<p>
It is now 2023, and the first <a href="https://nycers-info-murphy.blogspot.com/2021/04/the-bleeding-has-started-legacy.html">phase</a> of the replacement project is still in test. NYCERS has already budgeted $329M as of FY-2024 for the project and is projecting another $158M as of FY-2027, the new end date for the project. That adds up to a total of $487M. NYCERS unfortunately has a track record of underestimating future costs. So we should expect a higher total cost assumimg completion of the project.
</p>
<p>
The NYCERS budget was $55.2M in FY-2015. If you project a 3% increase every year, the FY-2024 budget would be $72.0M. The actual budget for FY-2024 is $165.9M.
</p>
<p>
In 2014, the City experienced a runaway IT project, CityTime. You can read the DOI report on the NYC.gov website. Just search for "CityTime" on the website. The LRP project is starting to look a lot like the CityTime project. There is no evidence of corruption but there is a lot to support a conclusion of gross incompetence.</p>jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-83387887551536248412023-09-14T14:42:00.008-04:002023-12-01T10:14:40.903-05:00Mayor Adams Budget Knife and the FY-2024 NYCERS Budget Update<script type="text/javascript">
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<p>
In a June 17, 2022 <a href="https://nycers-info-murphy.blogspot.com/2022/06/fy-2023-nycers-budget-update.html">posting</a>, I outined the history of NYCERS administrative budget.
<P>
On June 21, 2023, the NYCERS trustess adopted the FY-2024 admin budget.
<p>
It was a 13.3% increase over the FY-2023 budget. See the updated table below. The numbers speak for themselves. I wonder if the trustees are aware of this spending history.
<p>
At the same time NYC adopted a FY-2024 budget that was a reduction from $111.2B to $107.7B, a 3.5% cut. To be fair, the FY-2023 budget was originally adopted at $101.1B.
What made the Mayor allow NYCERS to increase its budget by 13.3%, while the City's budget was cut by 3.5%?
<p>
<table width=100%>
<head><style>table, th, td { border: 1px solid black;}</style></head>
<caption><b> History of NYCERS Admin Budget 1996-2024</b></caption>
<colgroup width = "6%" span="4">
</colgroup>
<colgroup width = "12%" span="4">
</colgroup>
<colgroup width = "10%" span="1">
</colgroup>
<tr align = "center">
<th>Fiscal Year
<th>F/T Count
<th>P/T Count
<th>College Aides / Hourly
<th>PS Budget
<th>OTPS Budget
<th>Fringe
<th>Total
<th>% Increase
<tr align = "center">
<td>2024
<td>501
<td>30
<td>16
<td>$54,290,508
<td>$98,040,138
<td>$13,633,903
<td>$165,964,549
<td>13.37%
<tr align = "center">
<td>2023
<td>485
<td>30
<td>16
<td>$43,016,089
<td>$90,436,500
<td>$12,942,144
<td>$146,394,733
<td>7.92%
<tr align = "center">
<td>2022
<td>474
<td>27
<td>16
<td>$38,397,943
<td>$85,531,063
<td>$11,719,465
<td>$135,648,471
<td>37.94%
<tr align = "center">
<td>2021
<td>438
<td>27
<td>16
<td>$36,842,549
<td>$50,210,145
<td>$11,283,945
<td>$98,336,639
<td>7.10%
<tr align = "center">
<td>2020
<td>438
<td>27
<td>16
<td>$35,262,139
<td>$45,862,557
<td>$10,689,350
<td>$91,814,046
<td>4.97%
<tr align = "center">
<td>2019
<td>428
<td>35
<td> 0
<td>$33,592,612
<td>$43,532,302
<td>$10,344,565
<td>$87,469,479
<td>39.44%
<tr align = "center">
<td>2018
<td>411<td>35<td>0
<td>$31,704,410
<td> $21,832,718
<td>$9,194,015
<td>$62,731,143
<td> 3.55%
<tr align = "center">
<td>2017
<td>401<td>35<td>0
<td>$31,056,080
<td> $20,916,796
<td>$8,605,288
<td>$60,578,164 <td> 4.81%
<tr align = "center">
<td>2016
<td>392<td>35<td>0
<td>$30,233,989
<td> $19,407,619
<td>$8,155,517
<td>$57,797,125 <td> 4.70%
<tr align = "center">
<td>2015<td>392<td>5<td>30
<td>$29,131,972
<td> $18,154,572
<td>$7,915,476
<td>$55,202,020 <td> 3.68%
<tr align = "center">
<td>2014<td>383<td>5<td>30
<td>$26,813,635
<td> $18,761,240
<td>$7,669,819
<td>$53,244,694 <td> 2.18%
<tr align = "center">
<td>2013
<td>380<td>5<td>20
<td>$26,623,635
<td> $17,951,822
<td>$7,532,499
<td>$52,107,956 <td> 1.93%
<tr align = "center">
<td>2012
<td>372<td>12<td>0
<td>$25,756,827
<td> $18,781,428
<td>$6,603,649
<td>$51,122,139 <td> 1.14%
<tr align = "center">
<td>2011
<td>372<td>12<td>0
<td>$26,046,827
<td> $18,492,228
<td>$6,006,573
<td>$50,545,628 <td> 2.76%
<tr align = "center">
<td>2010
<td>372<td>12<td>0
<td>$26,046,827
<td> $17,777,228
<td>$5,362,640
<td>$49,186,695 <td> 1.88%
<tr align = "center">
<td>2009
<td>371<td>13<td>0
<td>$25,189,842
<td> $18,208,861
<td>$4,879,903
<td>$48,278,606 <td> 6.22%
<tr align = "center">
<td>2008
<td>371<td>13<td>0
<td> $23,597,857
<td> $17,259,313
<td>$4,799,066
<td>$45,656,236 <td> 10.80%
<tr align = "center">
<td>2007
<td>364<td>13<td>0
<td> $22,616,783
<td> $14,258,471
<td>4,375,788
<td>$41,251,042 <td> 5.73%
<tr align = "center">
<td>2006
<td>342<td>13<td>30
<td> $20,255,911<td> $14,683,855 <td>$ 4,076,823
<td>$39,016,589 <td> 1.01%
<tr align = "center">
<td>2005
<td>342
<td>13
<td>30
<td> $19,737,687
<td> $14,851,355
<td>$3,887,624
<td>$38,476,666
<td> 1.2%
<tr align = "center">
<td>****
<td>
<td>
<td>
<td>
<td>
<td>
<td>
<td>
<tr align = "center">
<td>1996
<td>154<td>0<td>30
<td> $6,199,709
<td> $2,573,715
<td> na
<td> $8,773,424
<td>5.93%
</table>
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-51351366214202718482023-09-04T17:04:00.002-04:002023-09-08T11:10:36.985-04:00Why is the NYCERS Retirement Option Letter Taking 12 Months?<script type="text/javascript">
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<p>
At the July 2023 NYCERS Board meeting NYCERS staff briefed the Trustees that the lead time for retirement option letters (see below) was 12 months. This is a big service problem.
<p>
I’ve previously posted about this <a href="http://nycers-info-murphy.blogspot.com/2019/12/why-does-nycers-take-six-months-to.html">problem</a> in December 2019 when the lead time was six months as opposed to the target of 3 months. The NYCERS budget was $62.7M in FY-2018. It was $146.4M in FY-2023.
<p>
How did this problem become worse?
<p>
NYCERS has become devoured by an out-of-control IT project and has lost focus on providing service to members and retirees.
<p>
As reference, below is a chart of the NYCERS admin budget since 2018
<p>
<table border="1" style="width: 700px;">
<caption>NYCERS Staff and Budget FY-2018 to FY-2024</caption>
<thead>
<tr>
<th scope="col">Year</th>
<th scope="col">Full Timers</th>
<th scope="col">Part Timers</th>
<th scope="col">Temp-Hourly</th>
<th scope="col">PS Expenses</th>
<th scope="col">OTPS Expenses</th>
<th scope="col">Fringe Expenses</th>
<th scope="col">Total Expenses</th>
</tr>
<p>
<tr><td>2018 <td>415 <td>35 <td>0 <td>$31.7 <td>$21.8 <td>$9.1 <td>$62.7
<tr><td>2019 <td>428 <td>35 <td>0 <td>$33.6 <td>$43.5 <td>$10.3 <td>$87.5
<tr><td>2020 <td>438 <td>27 <td>16 <td>$35.3 <td>$45.9 <td>$10.7 <td>$91.8
<tr><td>2021 <td>474 <td>27 <td>16 <td>$36.8 <td>$50.2 <td>$11.3 <td>$98.3
<tr><td>2022 <td>483 <td>30 <td>16 <td>$39.5 <td>$84.5 <td>$11.8 <td>$135.8
<tr><td>2023 <td>485 <td>30 <td>16 <td>$43.0 <td>$90.4 <td>$12.9 <td>$146.4
<tr><td>2024 <td>501 <td>30 <td>16 <td>$54.3 <td>$98.0 <td>$13.8 <td>$165.9
</table>
<p>
<h3>Retirement Option Letter</h3>
<p>
When a NYCERS member is planning to retire, he/she usually visits the customer service center on Jay Street in downtown Brooklyn around 60 days before his/her retirement date. He/she files a retirement application and sits with NYCERS staff person to be briefed on the procedure.
<p>
One of the things the NYCERS agent does is give the member a printed estimate of the member's "maximum" retirement benefit amount along with reduced amounts for option selections for a given beneficiary. The estimate, however, is not adequate to allow a member to make an informed option selection.
<p>
Choosing an option rather than a maximum benefit allows a member to leave continuing benefit to a designated beneficiary after the member dies.
<p>
With a maximum choice NYCERS stops payment of the full benefit amount when the retiree dies. If the member chooses one of the option amounts, NYCERS will continue to pay a benefit to the beneficiary that the member designated when he/she picked an option choice.
<p>
This maximum/option election occurs after the member receives the final option letter. The members have 60 days after the date of the letter to make his/her choice.
Currently, NYCERS is informing members that it will take about twelve months for NYCERS to send the member a final option letter on the annual retirement benefit along with the reduced amounts associated with option benefits that member can select in place of the full benefit.
<p>
As of 2005, NYCERS was quoting a three-month period for sending a final option letter to members who were retiring.
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-6439087413698134692023-07-26T11:32:00.007-04:002023-07-27T10:19:38.115-04:00Court Stay for Retirees Fighting the City's Medicare Advantage Scam<script type="text/javascript">
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<p>
On July 7, 2023, the trial court issued a stay stopping the City from terminating Medicare supplemental insurance, Senior Care, for 139,442 city retirees on Medicare and their estimated 50,000 spouses. As part of the termination the City is jamming these retirees and their spouses into a private Medicare Advantage insurance plan offered by Aetna.
<p>
The following is a reported response to the stay from the Mayor:
<blockquote>
Mayor Eric Adams’ office said the city is considering appealing the injunction. “We are extremely disappointed by this misguided ruling,” it said in a statement. “The city’s Medicare Advantage plan, which was negotiated in close partnership with the Municipal Labor Committee, improves upon retirees’ current plans, including offering a lower deductible, a cap on out-of-pocket expenses, and new benefits, like transportation, fitness programs, and wellness incentives. Further delay in implementing it will only cause greater uncertainty for our retirees and have a detrimental impact on our city’s budget.”
</blockquote>
<p>
The statement is at best misleading. The mayor and the Municipal Labor Committee did collude to deprive Medicare eligible retirees of health benefits that have been in place since 1966 since the start of Medicare. The <a href="https://nycers-info-murphy.blogspot.com/2021/11/a-more-accurate-narrative-of-medicare.html">fight</a> over which plan is better is something that the Mayor wants to ignore. The alleged new benefits are not important when compared to access to quality health care, especially when you have serious health issues. The further delay that the mayor is worried about is not a delay but a very real hope that the retirees will keep their health benefits. As I have outlined below the just adopted City budget has sufficient funds allocated to cover the cost of Senior Care for Medicare eligible retirees.
<p>
As reported by the actuary in his FY-2022 OPEB report, there are a total of 246,832 city retirees with
<ul>
<li> 73,601 (plus 46,510 spouses) who are not eligible for Medicare and
<li> 173,231(plus 61,646 spouse) who are eligible for Medicare.
</ul>
<p>
When you subtract the 139,442 retirees covered by Senior Care, you are left with 33,789 Medicare eligible city retirees who have elected private health insurance via Medicare Advantage contracts between CMS, the federal Medicare administrator, and private insurance companies. As of January 1, 2022, the City is essentially no longer paying anything for Medicare Advantage contracts (monthly COBRA rate is $7.65). It is not clear why.
<p>
The City is currently paying $204.10/month per person for the Senior Care supplemental coverage. (The COBRA premium is $208.18/month).
<p>
That adds up to $464M per year - ((139,442 retirees + estimated 50,000 spouses)*$204.10*12).
<blockquote>
Note: The Health & Hospitals Corp. and the Housing Authority have 20,205 retirees covered by Medicare supplemental coverage and would have saved money if the termination had gone into effect on Sept. 1, 2023
</blockquote>
<p>
On June 30, 2023, the City Council adopted the NYC budget for FY-2024. The Mayor had asked for $2.959B for retirees’ health insurance and $5.64B for workers’ health insurance. The final budget cut the retiree health insurance appropriation by $500M down to $2.459B, what appears to be a ballpark number for the Medicare supplemental cost.
<p>
As reference, the adopted budget has the following allocations for health insurance:
<ul><li> Workers $5.644 billion
<li> Retirees $2.459 billion
</ul>
<p>
Note: The <u>monthly</u> cost for employees and non-Medicare eligible retirees
<ul><li> without dependents is $923.67, and
<li> with dependents it is $2,265.67.
</ul>
<p>
Note: The adopted budget also includes
<ul><li> $896 million for employee welfare fund benefits and
<li> $449 million for retiree welfare fund benefits.
</ul>
<p>
<b>Just for the reord, that is a total of $9.4 billion for health insurance and welfare benefits for workers and retirees.</b>
<h2>Enough Money for Senior Care</h2>
<p>
The retiree health insurance costs for FY-2024 based on retiree and spouse counts from the actuary’s June-2022 OPEB report breaks down as follows
<ul><li> Non-Medicare retirees $1.565 billion
<li> Medicare retirees $0.464 billion
<li> Part B refunds for Medicare retirees $0.465 billion
</ul>
<p>
The total of these three amounts is $2.494, very close to the $2.459B amount in the adopted budget. It appears that the adopted budget has enough money to pay for the Medicare supplemental coverage for the 139,000 plus Medicare retirees and their spouses, as if the City knew that it was going to have trouble in court.
<p>
The Mayor’s initial $500 million request and its final cut seems to have no rationale.
<p>
What these numbers show is that the Medicare with Senior Care is the most <u>economical</u> part of the health insurance program for City workers and retirees. In addition, Medicare with Senior Care is the most <u>effective</u> part of that health coverage.
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-75317799641648641712023-06-13T17:00:00.003-04:002023-07-22T12:37:50.430-04:00Three Card Monte -- NYC FY-2024 Executive Budget and Health Insurance Costs<script type="text/javascript">
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<p>
On May 31, 2023, retired employees of NYC filed suit against NYC over the <a href="http://nycers-info-murphy.blogspot.com/2023/03/new-battle-in-citys-war-on-citys.html">termination</a> of their Medicare supplemental health insurance. The City is doing this to save $450.0 million per year. The Health and Hosptials Corp. and the Housing Authority will also save a total $60.0 million per year.
<p>
So why is the City so desparate for money that it choose to strip its older city retirees of their health insurance and force them into a second class private insurance plan (Medicare Advatage)? The City could have attacked any number of other programs. Why the retirees?
<p>
The City has previously stated that it is giving these savings to the Health Insurance Satbilization Fund <a href="https://nycers-info-murphy.blogspot.com/2023/04/lets-get-something-straight-about.html">(HISF)</a> which in turn allows the City labor unions to funnel the money into their welfare funds. This is already getting comfusing but this may be why the unions sold the retirees down the river.
<h3>The City Budget - FY-2022 to FY-2024</h3>
<p>
In FY-2022, the City adopted a budget of $98.7B. This year, FY-2024, the City is proposing a budget of $106.7B. See chart below.
<h3>Health Insurance Costs from FY-2022 to FY-2024</h3>
<p>
Health insurance and welfare fund costs are embedded in the personal service category.
<p>
Again if you refer to the chart below, you can see that the City's health insurance costs have increased significantly from 2022 to 2024:
the City spent
<ol>
<li>$5.0B on employee health insurance in 2022
<li>$5.2B on employee health insurance in 2023
<li>$5.6B on employee health insurance in 2024
</ol>
<p>
Why did employee health insurance increase $400M in 2024? Is this the money that is going to be given to the union welfare funds?
<ol>
<li>$2.1B on retiree health insurance in 2022
<li>$2.0B on retiree health insurance in 2023
<li>$3.0B on retiree health insurance in 2024
</ol>
<p>
And why did the retiree health insurance costs go up $1.0B in 2024? Isn't the City saving $375M ($450M full year) by terminating insurance for retirees on Medicare.
<h3>Welfare Fund Costs from FY-2022 to FY-2024</h3>
<p>
The welfare funds have dropped since 2022 but not radically. Quite different from health insurance.
<ol>
<li>$1.118B on employee welfare fund benefits in 2022
<li>$0.858B on employee welfare fund benefits in 2023
<li>$0.876B on employee welfare fund benefits in 2024
</ol>
<ol>
<li>$0.494B on retiree welfare fund benefit in 2022
<li>$0.442B on retiree welfare fund benefit in 2023
<li>$0.449B on retiree welfare fund benefit in 2024
</ol>
<p>
<table border="1" style="width: 700px;">
<caption>Health Insurance and Welfare Fund Costs for NYC</caption>
<thead>
<tr>
<th scope="col">Category</th>
<th scope="col">FY-2022 Adopted Budget</th>
<th scope="col">FY-2022 Modified Budget</th>
<th scope="col">FY-2023 Adopted Budget</th>
<th scope="col">FY-2023 Modified Budget</th>
<th scope="col">FY-2024 Executive Budget</th>
</tr><p>
<tr>
<td>Total Budget
<tr>
<td>Personal Service
<td>$53.4B
<td>$54.4B
<td>$52.9B
<td>$52.5B6
<td>$55.6B
<tr>
<td>Other Than Persanal Service
<td>$45.9B
<td>$53.4B
<td>$47.7B
<td>$52.4B
<td>$48.3B
<tr>
<td>Debt Service
<td>$1.3B
<td>$6.3B
<td>$2.4B
<td>$4.5B
<td>$4.8
<tr>
<td>Less: Intra -City Expenditures
<td>-$1.9B
<td>-$2.3B
<td>-$2.0B
<td>-$2.3B
<td>-$2.0B
<tr>
<td>Net Total
<td> $98.7B
<td> $111.8B
<td> $101.1B
<td> $107.1B
<td>$106.7B
<tr><td><b>Fringe Costs</b>
<tr>
<td>Health Ins.-Employees
<td>$5.880B
<td>$5.061B
<td>$5.399B
<td>$5.164B
<td>$5.640B
<tr>
<td>Health Ins.-Retirees
<td> $2.142B
<td> $2.142B
<td> $2.260B
<td> $1.969B
<td> $2.959B
<tr>
<td>Welfare Funds-Employees
<td> $1.040B
<td> $1.118B
<td> $0.938B
<td> $0.858B
<td> $0.876B
<tr>
<td>Welfar Funds-Retirees
<td> $0.491B
<td> $0.494B
<td> $0.442B
<td> $0.442B
<td> $0.449B
<tr>
<td>Pensions
<td>$9.921B
<td>***
<td>$9.305B
<td>***
<td>$9.525B
</table>jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-12212849295500399082023-05-21T12:57:00.002-04:002023-05-21T14:06:27.933-04:00Let the Old Folks Die But Let's Take Care of Wall Street<script type="text/javascript">
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<p>
I've recently written about the City's new <a href="https://nycers-info-murphy.blogspot.com/2023/03/new-battle-in-citys-war-on-citys.html">attack</a> on the health care of city retirees. It is almost certain that some retirees will die because of the City's actions and complicity of the retirees' former labor unions. All this so that the City can save $460M a year. Talk about blood money.
<p>
But every year the City and the unions are more than happy to squander money on Wall Street.
<p>
Below are copies of the income statements from 2002 and 2022 for the City's five pension funds. That spans a 21 year period in which the penion funds have gone crazy with throwing money at Wall Street.
<p>
In 2002 the pension funds spent $102M on investment fees. In 2022 they spent $1.509B. That amount is over 14 times more than what they spent 2002. Just in case you think that is because the assets of the five funds have increased 14 times - no. They increased less than 3 times their value in 2002, $93.5B versus $263.2B.
<p>
I defy anyone to put forward an honest reason for this craziness. Not for nothing - the pension funds lost almost $32B in FY-2022
<p>
<div class="separator" style="clear: both;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDysnXCK6x6Vxn4PcYmw4eJf3Qv514snEd887ZbBckj0jpPhFzfDged5DbpEKeNUTDKr1lVb9A0PHHVgHZpLkRbzUepB04P_FuNs6xELHV0Rf2WfNu9e0AOf9nWTX9aEIGu9OfYW446SJCwrTLBupDq_Si2k2dod4aqkQoUfRa2H6NEFmiouP9Sw/s1650/Pic-2002%20Inc-Statmt.png" style="display: block; padding: 1em 0; text-align: center; clear: left; float: left;"><img alt="" border="0" height="900" data-original-height="1650" data-original-width="1275" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDysnXCK6x6Vxn4PcYmw4eJf3Qv514snEd887ZbBckj0jpPhFzfDged5DbpEKeNUTDKr1lVb9A0PHHVgHZpLkRbzUepB04P_FuNs6xELHV0Rf2WfNu9e0AOf9nWTX9aEIGu9OfYW446SJCwrTLBupDq_Si2k2dod4aqkQoUfRa2H6NEFmiouP9Sw/s600/Pic-2002%20Inc-Statmt.png"/></a></div>
<p>
<div class="separator" style="clear: both;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3mDUAQreSIsMXYb5cMCxH30vntKQmL0-040isjNSlDUrWI2Uo_QzwTyfMQYIwJQu6t9d0rkrbPdOI9AMoh0BQxa1j6KyXwdEsHK0Rga6w-va3uk3k42RVjl2wPxBoQzr0kaIYPXa7g9THWFkNOXCMAu1qKTxNtS2hSnm-RQV_27o1oa9YBy5skg/s1600/Pic-2022%20Inc-Statmt.png" style="display: block; padding: 1em 0; text-align: center; clear: left; float: left;"><img alt="" border="0" height="900" data-original-height="1650" data-original-width="1275" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3mDUAQreSIsMXYb5cMCxH30vntKQmL0-040isjNSlDUrWI2Uo_QzwTyfMQYIwJQu6t9d0rkrbPdOI9AMoh0BQxa1j6KyXwdEsHK0Rga6w-va3uk3k42RVjl2wPxBoQzr0kaIYPXa7g9THWFkNOXCMAu1qKTxNtS2hSnm-RQV_27o1oa9YBy5skg/s1600/Pic-2022%20Inc-Statmt.png"/></a></div>jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-12077865036907155882023-05-05T14:51:00.005-04:002023-05-07T10:00:27.849-04:00The NYCERS Trustees Are Out of Touch<script type="text/javascript">
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<p>
At the April 17, 2023 NYCERS Board of Trustees meeting, a NYCERS employee gave an <a href="https://play.champds.com/nycers/event/162">update</a> on the status of the Legacy Replacement Project (LRP). You can find the start of the presnation at the 53rd minute of video of the meeting. It runs for four minutes and ends with no questions from the brain dead trsutees.
<p>
I defy anyone to explain in plain English what the employee said. Maybe it's that the project is 15 months behind schedule. The four minute ramble is the most incoherent pile garbage I have ever heard.
<p>
<h2>
<p>
The LRP</h2>
The <a href="https://nycers-info-murphy.blogspot.com/2021/04/the-bleeding-has-started-legacy.html">LRP</a> was started in 2015. Since <a href="https://nycers-info-murphy.blogspot.com/2022/11/history-of-nycers-admin-expenses-fy.html">FY-2016</a> NYCERS has spent over $50M on consultants and over $30M on software.
<p>
<h2>The City - Cutting Health Benefits for City Retirees on Medicare</h2>
<p>
While the City is turning a blind eye to runaway software projects at NYCERS, it is <a href="https://nycers-info-murphy.blogspot.com/2023/03/new-battle-in-citys-war-on-citys.html">cutting</a> the health benefits for city retirees on Medicare.
<p>
<h2>Climate Change and Private Equity</h2>
<p>
Someone needs to tell the Comptroller and the trustees that when it comes to private equity/limited partnerships, they have absolutely no control over what the PE general manager does with the money that the pension fund invests with the PE fund. You want to take action about <a href="https://www.thecity.nyc/2023/4/6/23673297/public-pensions-divest-fossil-fuels">climate change</a> - get out of limited partnerships. They are for the dumb-dumbs in the room.
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-85151772632599882882023-04-14T12:37:00.009-04:002023-04-18T11:00:57.080-04:00Lets Get Something Straight About the Health Insurance Stabilization Fund - It's the City That Is Raiding It, Not Senior Care.<script type="text/javascript">
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<p>
I just read a letter written by the president of the local representing NYC correction officers. He was trying to defend his vote to sell out retirees health benefits.
He starts out moaning about the Health Insurance Stabilzation Fund (HISF). He states that rising health care costs are diminishing the HISF.
<p>
The City and the unions have been crying over the HISF ever since this attack on retirees started. So below is the income statement chart for the fund since 2012. I've only included the main items.
<p>The fund has only paid GHI $378M over the eleven year period.
<p>
But over the same period the HISF fund has paid:
<ol>
<li>the City $1.889B ($77M every year plus a $1.0B bonus in 2015).
<li>the union welfare funds $996M and
<li> other discretionary benefit providers $654M.
</ol>
<p>
Payments to the City, the welfare funds, and the other benefit providers are controlled by the unions and the city subject to collective bargainning. You know collective bargainning, where the unions fight with the City to get what they deserve and not give things back to the City.
<p>
<table border="1" style="width: 800px;">
<caption>Income Statement History for the HISF</caption>
<thead>
<tr>
<th scope="col" width "60">Fiscal Year
</th>
<th scope="col" width="65">Opening Balance</th>
<th scope="col">1984 HBA City Contib Pay In</th>
<th scope="col" width ="80">City Liability Pay In: GHI less than HIP</th>
<th scope="col">Other Benefit Pay Out</th>
<th scope="col">Welfare Fund Pay Out</th>
<th scope="col">2009 HBA City Refund Pay out</th>
<th scope="col">GHI Pay out: GHI greater than HIP</th>
<th scope="col">CBA City Refund Pay out</th>
<th scope="col">Closing Balance</th>
</tr>
</thead>
<p>
<tr>
<td>2012
<td>$587M
<td>$35M
<td>$465M
<td><font color="red">$48M</font>
<td><font color="red">$38M</font>
<td><font color="red">$112M</font>
<td><font color="red">$0.0M</font>
<td><font color="red">$0.0M</font>
<td>$894M
<tr>
<td>2013
<td>$894M
<td>$35M
<td>$0.0M
<td><font color="red">$39M</font>
<td><font color="red">$38M</font>
<td><font color="red">$112M</font>
<td><font color="red">$0.0M</font>
<td><font color="red">$0.0M</font>
<td>$744M
<tr>
<td>2014
<td>$744M
<td>$35M
<td>$1.162B
<td><font color="red">$40M</font>
<td><font color="red">$38M</font>
<td><font color="red">$112M</font>
<td><font color="red">$50M</font>
<td><font color="red">$0.0M</font>
<td>$1.706B
<tr>
<td>2015
<td>$1.706B
<td>$35M
<td>$336M
<td><font color="red">$45M</font>
<td><font color="red">$38M</font>
<td><font color="red">$112M</font>
<td><font color="red">$100M</font>
<td><font color="red" font size = "4"><b>$1.0B</b></font>
<td>$789M
<tr>
<td>2016
<td>$789M
<td>$35M
<td>$1.202B
<td><font color="red">$43M</font>
<td><font color="red">$52M</font>
<td><font color="red">$112M</font>
<td><font color="red">$8M</font>
<td><font color="red">$0.0M</font>
<td>$1.829B
<tr>
<td>2017
<td>$1.829B
<td>$35M
<td>$54M
<td><font color="red">$57M</font>
<td><font color="red">$188M</font>
<td><font color="red">$112M</font>
<td><font color="red">$0.0M</font>
<td><font color="red">$0.0M</font>
<td>$1.586B
<tr>
<td>2018
<td>$1.586B
<td>$35M
<td>$232M
<td><font color="red">$57M</font>
<td><font color="red">$38M</font>
<td><font color="red">$112M</font>
<td><font color="red">$2.0M</font>
<td><font color="red">$0.0M</font>
<td>$1.643B
<tr>
<td>2019
<td>$1.643B
<td>$35M
<td>$136M
<td><font color="red">$27M</font>
<td><font color="red">$81M</font>
<td><font color="red">$112M</font>
<td><font color="red">$39.3M</font>
<td><font color="red">$0.0M</font>
<td>$1.587B
<tr>
<td>2020
<td>$1.587B
<td>$35M
<td>$0M
<td><font color="red">$83M</font>
<td><font color="red">$171M</font>
<td><font color="red">$112M</font>
<td><font color="red">$3.9M</font>
<td><font color="red">$0.0M</font>
<td>$1.369B
<tr>
<td>2021
<td>$1.369B
<td>$35M
<td>$154M
<td><font color="red">$74M</font>
<td><font color="red">$160M</font>
<td><font color="red">$112M</font>
<td><font color="red">$175.9M</font>
<td><font color="red">$42.8M</font>
<td>$1.031B
<tr>
<td>2022
<td>$1.031B
<td>$35M
<td>$0.0M
<td><font color="red">$136M</font>
<td><font color="red">$100M</font>
<td><font color="red">$112M</font>
<td><font color="red">$0.0M</font>
<td><font color="red">$0.0M</font>
<td>$900M
</table>
<p>
<h2>The MLC (DC-37 and UFT) and the City Attack on Senior Care</h2>
<p>Along with the garbage about the HISF, this president had the gall to say that the MLC only voted to adopt the Aetna Medicare Advantage plan and not the termination of Senior Care. The City was required by a collective bargainning agreement to get the approval of the MLC before it terminated the GHI Senior Care contract. This union wants to hide the fact that it was part of the crime.
<p>
I hope every Correction Officer, who has to retire on disability and collect Social Security benefits, knows that he/she will get hammered with the Medicare Advantage crap. This is not about Aetna, all Medicare Advatage plans are inferior to Medicare with a supplemental plan.
<p>
I hope I don't have to tell anyone how to deal with statements from insurance companies. We have a massive legal industry based on this situation.jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com1tag:blogger.com,1999:blog-3639776205470838484.post-4075104212418980902023-03-30T18:21:00.011-04:002023-05-14T11:54:52.243-04:00New Battle in the City's War on the City's Retirees<script type="text/javascript">
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<p>
In 2021, the former City administration, without a legal opinion from Corp Counsel, tried to force Medicare eligible (ME) retirees to pay for their Medicare supplemental insurance, Senior Care.
<p>
This attempt flew in the face of 55 years of practice based on local law and collective bargaining agreements. The City wanted to save the $191 a month per retiree and spouse that it was paying for this coverage so that the City could give that money to the City unions’ welfare funds.
<p>
The City did not plan on the retirees fighting back in court and then having them win both at trial and on appeal.
<p>
The City then tried to gut the law guaranteeing the City’s obligation to pay for health insurance. That was the law that the court based its decision on. Again, the City failed. This time at the City Council.
<h2>Revenge</h2>
<p>
Now, in retaliation for losses in court and at the City Council, the Adams administration is dropping the 57 year old Medicare supplemental coverage (Senior Care) for older (ME) city retirees.
<p>
As of September 1, 2023, the City will force all Medicare eligible retirees and spouses (238,000) into a <a href="https://nycers-info-murphy.blogspot.com/2021/11/a-more-accurate-narrative-of-medicare.html">inferior</a> Medicare Advantage plan (private insurance) which will cost the City nothing. Retirees, however, will be locked into paying whatever the new plan charges for Part D drug coverage. The only retirees to be left alone are the ones in the HIP Medicare Advantage plan (22,300).
<p>
This is a more drastic attack on the retirees than the illegal 2021 attempt to force retirees to pay for Senior Care.
The City is now arbitrarily and capriciously dropping all health coverage for older retirees other than for the proposed Aetna Medicare Advantage plan.
This means about 170,000 Senior Care retirees and spouses will be wrenched out of Medicare and jammed into a private health insurance plan.
<p>It is a absolute fact that traditional Medicare with supplemental insurance is <a href="https://nycers-info-murphy.blogspot.com/2021/11/a-more-accurate-narrative-of-medicare.html">better</a> than any Medicare Advantage plan. Anyone who tells you otherwise, including the mayor or any union rpresentative, is either lying or uninformed. <b>This action is about reducing benefits to save money, period.</b>
<p>
In addition, Medicare Advatage insurers have been exploiting Medicare for over a decade as noted by NY Times (4/1/2023):
<blockquote>"Nearly every large insurer in the program has settled a fraud lawsuit for such conduct. Evidence of the overpayment has been documented by academic studies, government watchdog reports and plan audits."
</blockquote>
<p>
You can just imagine the turmoil that this will cause for very old retirees who will no longer be covered by Medicare and Senior Care. They won’t even know about it until they go to their doctor and are told that they don’t have Medicare anymore.
<p>
Also included will be 780 line of duty widows who will have their health insurance turned upside down.
<h2>Costs</h2>
<p>
This attack will potentially save the City $454M per year ($2,400 per retiree & spouse) . Health & Hospital Corp will save $45.8M per year and the Housing Authority will save $16.1M per year. These are rough amounts based on the NYCERS & TRS actuary’s 2022 annual OPEB report.
There are some complications which include:
<ol>
<li> 13,000 ME retirees who have non-ME eligible dependents that will still cost the City $27,000 per year per retiree.
<li> Non-ME retirees who have waived health coverage but will now re-enroll in GHI-CBP at $10,200 or $27,000 per year
</ol>
The City claims $600M annual savings but never documents their figures.
<p>Senior Care is the least expensive component of the City’s legal obligation to pay for the costs for health insurance for its workers and retirees. It is also the most effective component of that coverage.
<h2>Betrayal</h2>
<p>
For the City to be able to drop Senior Care, it had to get a majority of the city unions to agree. On March 9, 2023, the UFT and DC-37 agreed to sell out these older retirees, many who were their members when they worked for the City. For what? We can only suspect.
<p>
The UFT, however, will have legal (Chapter 504/Laws 2009 Part B - Section 14) problems with these cuts. Any dollar <a href="https://nycers-info-murphy.blogspot.com/2021/09/city-incompetence-and-medicare.html">reductions</a> imposed on retiree benefits will have to be matched by dollar reductions imposed on current workers. The UFT has not been honest with their members about this state statutory requirement.
<h2>Opting Out</h2>
<p>
By federal law the City must allow any retiree to opt out of the mandatory Medicare Advantage plan. The City is trying to equate this federal opt out choice to a retiree’s waiver of health insurance benefits. This will be challenged in court. They City does not have the right to penalize retirees for exercising their rights under the Medicare law.
<p>
The City is pushing this waiver concept for retirees opting out because they want to be able to:
<ol>
<li>stop refunding Part B premiums to these retirees
<li>terminate any welfare drug subsidies they receive (possibly all welfare benefits) and
<li>drop health insurance coverage for dependents of these retirees.
</ol>
<p>
This plan is punitive on it face and reflects the City’s anger at having been beaten in the courts and at the City Council. It also reflects the betrayal by the unions of the retirees.
<p>
Retirees with sufficient financial resources will have a choice to avoid the garbage MA plan but most retirees will not have the money to opt out.
<h2>Choice</h2>
<p>
In 1965, choice was the driving concept behind the City – Union agreement to offer health insurance to workers and retirees.
<p>
<h3>The City's 1965 letter to the Board of Estimate</h3>
<blockquote>
The City of New York Department of Personnel- City Civil Service Commission,<br>
220 Church Street,<br>
New York, N. Y. 10013,<br>
<p>December 14, 1965.
<p>
To the Board of Estimate: Subject: Proposed Resolution Extending Choice of Health Insurance Plans to Active and Retired City Employees.
Gentlemen—
<p>
On October 24, 1946, the Board of Estimate adopted a resolution ( Cal. No. 11), approving a proposed agreement between The City of New York and the Health Insurance Plan of Greater New York for the furnishing of medical benefits to the employees of The City of New York or of any agency or department thereof, who are paid out of the City treasury, and their families, who voluntarily elect medical coverage.
<p>
The City was prompted in entering into this agreement with the Health Insurance Plan of Greater New York and in authorizing the payment of up to 50 per cent of the premiums of the medical, surgical and hospital insurance coverage by the great need for The City of New York to provide for and protect the general health and welfare of its employees and their families. The City took into consideration the fact that sickness and physical disability of employees or members of their families are responsible for the loss of many man-days in each year's work, are reflected in lower morale among employees and affect their work and productivity.
<p>
Your honorable Board, on February 11, 1965, adopted a resolution ( Cal. No. 155), which allowed The City of New York to contract with the Associated Hospital Service of Greater New York ( Blue Cross), Group Health Insurance, Inc. ( G.H.I.), United Medical Service, Inc. ( Blue Shield), and the Metropolitan Life Insurance Company, to provide a choice of health insurance plans for certain employees in the uniformed forces of The City of New York.
<p>
As a result of collective bargaining negotiations entered into with the representatives of certain classes of employees in the uniformed forces and other occupational groups; personnel orders were issued by his Honor, the Mayor, and determinations made by the Comptroller in the case of employees subject to Section 220 of the State Labor Law, providing for the assumption by The City of New York of
<p>
- 75 per cent of the total payment for choice of health and hospital insurance during the first year of such choice, not to exceed 75 per cent of the full cost of H.I.P.-Blue Cross (21-day plan) on a category basis, and, thereafter, of
<p>
- 100 per cent of the full payment for choice of health and hospital insurance, not to exceed 100 per cent of the full cost of H.I.P.-Blue Cross ( 21-day plan) on a category basis.
<p>
It appears desirable that the City institute a uniform policy for all City employees with respect to choice of health and hospital plans. Therefore, in line with the resolutions previously adopted by the Board of Estimate and with the various personnel orders issued by his Honor, the Mayor, on the choice of health and hospital insurance plans, with the assumption by the City of a greater share of premium costs, there is herewith presented for your consideration and determination a proposal, in which the Director of the Budget and I concur,
<p>providing<br>
- to all City employees who are eligible for H.I.P.: Blue Cross coverage and<br>
- to retired employees,<br>
health and hospital insurance benefits, which are the same as, or equivalent to, those offered to members of the uniformed forces and other categories of City employees. <p>
Respectfully submitted, THEODORE H. LANG, City Personnel Director.
</blockquote>
<h3>Retiree Data</h3>
<p>
<table border="1" style="width: 500px;">
<caption>Medicare Eligible Retirees with Senior Care out of all Medicare Eligible Retirees</caption>
<thead>
<tr>
<th scope="col">Agency
</th>
<th scope="col">Senior Care Retirees
</th><th scope="col">Spouses</th>
<th scope="col">All Medicare Retirees
</th>
<th scope="col">Spouses
</th></tr><p>
<tr>
<td>City - <td>139,442 <td> 49,320 <td>173,231 <td> 61,646
<tr>
<td>HHC<td>15,156 <td>3,940<td>20,110<td>5,266
<tr>
<td>HA <td>5,046 <td>1,660<td> 6,741<td>2,217
<tr><td>WFA<td> 2<td>0<td>5<td> 1
</table>
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-73048215399303216882022-12-31T09:32:00.142-05:002022-12-31T14:28:36.017-05:00More on the War on Older City Retirees and the Tsunami of Health Insurance Costs for NYC<script type="text/javascript">
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<p>
In the middle of the City's war on Medicare city retirees and their inexpensive and high quality health insurance, the City is being hit by a tidal wave of rising health insurance for its employees and younger retirees.
</p><p>
In FY-2014 the City spent $5.0B on health insurance. In FY-2018 it spent $6.9B. In FY-2022 it spent $8.7B. In three years, that amount could easily be $12.0B surpassing pension costs.
</p><p>
On a more personal level, the annual cost for family coverage for the basic health insurance plan for employees and younger retirees has exploded over the last 25 years as outlined in the table below:
</p><table border="1" style="width: 400px;">
<caption>Annual Costs for Family Health Insurance Coverage 1997-2022</caption>
<thead>
<tr>
<th scope="col">Date
</th><th scope="col">Annual GHI-CBP Cost
</th><th scope="col">Annual HIP-HMO cost
</th></tr><tr>
<td>July 1, 1997
</td><td>$4,601.53
</td><td>$4,356.00
</td></tr><tr>
<td>Jan 1, 2006
</td><td>$8,986.12
</td><td>$8,687.76
</td></tr><tr>
<td>July 1, 2011
</td><td> $13,791.41 </td><td> $15,391.06
</td></tr><tr>
<td>July 1, 2013
</td><td> $14,330.82 </td><td> $17,607.41
</td></tr><tr>
<td>July 1, 2014
</td><td> $15,838.00
</td><td> $17,826.94
</td></tr><tr>
<td>July 1, 2015
</td><td>$16,933.29
</td><td>$18,358.94
</td></tr><tr>
<td>July 1, 2016
</td><td> $17,997.88 </td><td> $19,241.18
</td></tr><tr>
<td>July 1, 2017
</td><td> $19,603.88 </td><td> $20,749.53
</td></tr><tr>
<td>July 1, 2018
</td><td> $19,603.88 </td><td> $22,236.35
</td></tr><tr>
<td>July 1, 2019
</td><td>$21,485.88 </td><td> $23,106.35
</td></tr><tr>
<td>July 1, 2021
</td><td> $26,904.59 </td><td> $25,306.12
</td></tr><tr>
<td>July 1, 2022 </td><td>$26,904.59 </td><td>$27,250.12
</td></tr><tr>
<td>Oct 1, 2022 </td><td>$29,577.53 </td><td> $27,057.06
</td></tr></thead></table>
<p>
In contrast, over the 25 year period from 1997 to 2022 the City's <b>annual</b> cost per Medicare retiree's supplemental insurance has risen from $1,063.76 to $2,388.82.
</p><p>
</p><h3>Loss of Coverage</h3>
<p>
On top of these increases, the level of coverage has decreased. In addition to the introduction of copays for both HIP-HMO and GHI-CBP, many doctors have been deciding to stop accepting payment from GHI because of the plan's deficient payment for services. GHI is the main plan for employees and younger retirees. Based on documents from OLR 73% of employees/retirees use GHI while 19% use HIP. Both plans are run by Emblemhealth. Another drawback is that employees who work or live outside the NYC metro area very often have to sign up for plans with added premiums to get coverage where they live.
</p><p>
</p><h3>Response</h3>
<p>
Up until now the City has not addressed the macro problem. It has dicked around the edges but has not challenged Emblemhealth to provide better coverage at less cost. Why not?
</p><p>
In FY-2022 the City paid Emblemhealth $8.4B out a total of the $8.7B total of its health insurance costs, not including the payments to Emblemhealth for prescription drugs coverage. Drug coverage is paid by many employees out of their paychecks or by the unions out of their welfare funds.
</p><p>
It is not clear whether the cost explosion is Emblemhealth's fault or the general cost of health care. I suspect that a new insurance vendor will not solve the problem. I suspect that every US employer is facing this problem.
</p><p>
Consolidating with the New York State government health insurance plan may help somewhat but the scale of this problem appears to demand a national solution.
</p><h3>How CMS-Medicare Could Help</h3>
<p>CMS is the largest payor of health care costs in the US. It is highly efficient in making these payments. That is why most doctors accept Medicare patients.
</p><p>Maybe the City could enter into an agreement with CMS to make payments for City employees and non-Medicare retirees, and in turn the City reimburse CMS for the payments plus administrative costs.
</p><p>
Structurally, CMS pays 80% of its scheduled fees for medical services to Medicare enrolled persons. The City could agree to reimburse 100% of scheduled fees to satisfy its Section 12-126 obligation. Or it could get an agreement with all from all parties to a lower percentage and change the benchmark in Section 12-126 to a percentage of the CMS fee schedule instead of the current private sector benchmark.
</p><p>
This would eliminate the insurance company overhead/profit, improve coverage, and expand the number of care providers.
</p><p>
In the long term, hopefully, CMS will be able to constrain the rise in health care costs for everyone. Health care is not a free market.
</p><p>
</p><h3>Note</h3>
<p> City managerial employees/retirees pay for their drug coverage. The City should push for employees/retires to also pay for their drug coverage on an income scale basis in place of the City funded union welfare funds.
</p><p>
</p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p>jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-56546279941238086312022-12-29T09:59:00.000-05:002022-12-29T09:59:45.921-05:00Appellate Win - Now the Political War at the City Council over Section 12-126<script type="text/javascript">
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<p>
On November 22, 2022, a NY appeals court decided in favor of the Medicare eligible city retirees in their fight with the City to keep their Medicare supplemental insurance coverage. The City had attempted force the retirees into a Mediacer Advatage plan that the City did not have to pay for.
<p>
<h3>The Stabilization Fund and Age Discrimination</h3>
<p>
In a previous post about the <a href="http://nycers-info-murphy.blogspot.com/2022/02/the-reason-for-medicare-advantage-scam.html">Medicare Advantage Scam</a> I highlighted a document from OLR to the former Mayor. It went into great detail about the Health Insurance Stabilization Fund, the HISF.
<p>
In 1983 the City and its labor unions agreed to set up the HISF to equalize HIP and GHI insurance rates.
<p>
In 2005 HIP and GHI merged into Emblemhealth. The City fought this merger in court but lost the fight.
<h3>The HISF Agreement </h3>
<p>
The following is part of a section from the UFA's 2008-2010 labor contarct with the City that recites the HISF agreement:
</p>
<blockquote>
<p>Section 3.
<p>
A. Effective July 1, 1983 and thereafter, the City's cost for each employee and each retiree under ager 65 shall be qualized at at the community rated basic HIP/HMO plan payment rate as approved by the State department of Insurance on a category basis of individual or family e.g.the Blue Cros/GHI-CBP payment for family coverage shall be equal to the HIP/HMO payment for the family coverage.
<p>
B. If a replacement plan is offereed to employees and retirees under age 65 which exceeds the cost of the HIP/HMO equalization provided in Section 3a, the City shall not bear the additional costs.
<p>
C. The City (and other related Employers) shall continue to contribute on a City employee benefits program-wide basis the additional annual amount of $30 million to maitain the health insurance stabilization reserve fund which shall be used to continue equaliztion and protect the integrity of health insurance benefits.
<p>
The health insurance stabilization reserve fund shall be used: to provide a sufficient reserve; to maintain to the extent possible the current level of health insurance benefits provide under the Blue Cross/GHI-CBP plan; and if sufficient funds are available , to fund new benefits.
<p>
The health insurance stabilization reserve fund shall be credited with the dividends or reduced by the losses attributable to the Blue Cross/GHI-CBP plan.
<p>
Pursuant to paragraph 7 of MLC Healt benefits Agreement, notwithstanding the above in each of the fiscal years 2001 and 2002, the City shall not make the annual $35 million contributions to the health insurance stabilization fund.
</blockquote>
<p>It appears that this agreement violates the federal age discrimination law (ADEA - 1967) by giving a benefit to a subset of a group based only on their age. Why didn't the agreement provide equaliztion for retirees age 65 and older?
<h3>How Come?</h3>
<p>
Actually, there was no need to provide an equalization mechanism for retirees age 65 or older. The cost of their health insurance, both for GHI Senior Care and HIP-Medicare, has always been significantly less than the HIP/HMO benchmark.
<p>
In fact, the City has always used the GHI Senior Care cost as the internal benchmark cost for Medicare eligible city retirees. This was done administratively without reference to Section 12-126 which had set up the HIP/HMO benchmark. With the start of Medicare in July 1966, the HIP/HMO health care service model conflicted with the original Medicare indemnity model, whereas the GHI/CBP indemnity model was a better match.
<p>
Starinting 1965, the City contracted with GHI to provide an alternative health insurance plan. other than HIP, to employyes and retirees. GHI was built to handle claims coming in from out of network doctors and hospitals.
<p>
In 1966, Medicare began paying 80% of doctors and hospital costs for enrolled retirees over age 65. Very quickly most doctores and hospitals began particpating in Medicare. HIP was not equiped to pay claims from independent doctors and non-HIP hospitals. The City adapted the GHI/Blue Cross plan
Over the years, GHI Senior Care has become the dominant choice of city retirees enrolling in Medicare with a 84% share while the HIP Medicare plan has a 12% share jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-88380030720650073512022-11-17T16:05:00.004-05:002023-04-04T10:27:02.853-04:00Mayor Adams and His War on Older City Retirees - By the Numbers<script type="text/javascript">
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<p>Every Halloween the Comptroller releases the City's <a href="https://comptroller.nyc.gov/reports/annual-comprehensive-financial-reports/">finacial report</a> for the previous July-June budget year.
<p>
During the year ending on June 30, 2022 the City spent
<ul>
<li>$9.7B on pensions,
<li>$13.2B on fringe benefits,
<li>$31.0B on salaries, and
<li>$52.7B on other than personnel services, the famous OTPS expenses.
</ul>
<p>
Of the $13.2B for fringe benefits
<ul>
<li>$8.7B went for health insurance for workers and retirees,
<li>$2.3B went for Social Security contributions,
<li>$1.4B went for welfare benefit funds (both city and union),
<li>$0.13B went for union annuity funds,
<li>$0.6B went for workers comp insurance and other items.
</ul>
<p>
Of the $8.7B for health insurance,
<ul>
<li>
$6.5B went for workers health insurance,
<li>
$1.3B went for younger retirees health insurance,
<li>
$0.5B went for older retiress health insurance, and
<li>
$0.5B went for Medicare Part B premium refunds.
</ul>
<h2>Attack on Older Retirees</h2>
<p>
The Mayor (and the MLC) wants to stop paying for the GHI supplemental health insurance for city retirees and their spouses who are covered by Medicare. The Mayor wants to force all of these retirees into a Medicare Advantage plan. It is an inferior insurance plan as compared to the supplemental plan but, of course, the City does not have to pay for the Medicare Advantage plan.
<p>
Last year the City tried to ram this down our throats but it lost its attempt in court. It now wants to cut the law (Section 12-126) that protects retirees health insurance. It also protects workers health benefits.
<p>
There are 139,442 city retirees covered by the GHI supplemental plan along with 20,205 retirees who retired from the Health and Hospitals Corp and the Housing Authority.
<p>
The monthly cost for each retiree and each spouse in this group is $201. The City's total cost in FY-2022 for the GHI supplemental insurance for city retirees was $425M and $87M for HHC and HA retirees.
<p>
Any US citizen eligible for Medicare can signup for a no premium Medicare Advantage plan. The City is offering older retirees something they already have, whether or not they are a city retiree. What the City is really trying to do is to abort its current obligation under law to pay for health insurance coverage for older city retirees and their spouses.
<h2>Other Ways for the City to Save Money Without Beating up on Retirees</h2>
<p>
During FY-2022, the City incurred the following expenses:
<ol>
<li> $269M in administrative expenses for the five pension systems. That cost could be cut in half ($135M) and still improve services. I know, I was the executive director at NYCERS for many years.
<li> $1.5B in investment fees at the five pension systems which lost $31.0B during the year. The systems should be required to limit fees to 20 basis points of assets. That would save $1.0B a year.
<li> $2.1B to subsidize the teachers deferred compensation plan (403-b plan). No other city employees receive this subsidy. This is in addition to the cost of the teachers regular city pension benefit. This benefit could be radically cut or eliminated with a huge savings to the City. And in a counterintuitive view, members of TRS would probably make more money if they deversified their assets rather than parking them in the guaranteed stable income fund.
</ol>
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-64878439790543869802022-11-03T10:47:00.002-04:002023-05-05T14:32:39.136-04:00History of NYCERS Admin Expenses - FY-2000 - 2022<script type="text/javascript">
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The following is a chart of NYCERS administrative expenses from 2000. The information comes from NYCERS Comprehensive Annual Financial Report. As a point of reference NYCERS had an annual budget of $8.8M in FY-1996, the last year NYCERS was part of the city budget.
<p>
<table border="2" width = "100%">
<caption>NYCERS Admin Expenses</caption>
<colgroup align= "center" span="1" width = "10%">
</colgroup>
<colgroup align = "right" width = "12%" span="1">
</colgroup>
<colgroup align = "right" width = "12%" span="1">
</colgroup>
<colgroup align = "right" width = "12%" span="4">
</colgroup>
<colgroup align = "right" width = "12%" span="1">
</colgroup>
<thead>
<tr>
<td>Fiscal Year</td>
<td>Personnel Expenses</td>
<td>Contracts & Consultants</td>
<td>Phone, Mail, & Printing</td>
<td>Rentals</td>
<td>Software, Hardware, Support, Supplies, & Maintenance</td>
<td>Depreciation & Credits</td>
<td>Total</td>
</tr>
</thead>
<tbody><tr>
<td>FY-2022
<td style="text-align:right">$52,303,943
<td style="text-align:right">$27,418,528
<td style="text-align:right">$1,029,424
<td style="text-align:right">$9,329,701
<td style="text-align:right">$14,906,397
<td style="text-align:right">$0
<td style="text-align:right">$104,987,993
<tr>
<td>FY-2021
<td style="text-align:right">$48,693,043
<td style="text-align:right">$14,058,975
<td style="text-align:right">$1,290,546
<td style="text-align:right">$6,617,040
<td style="text-align:right">$16,753,334
<td style="text-align:right">$0
<td style="text-align:right">$87,412,938
<tr>
<td>FY-2020
<td style="text-align:right">$45,736,806
<td style="text-align:right">$11,337,750
<td style="text-align:right">$1,173,896
<td style="text-align:right">$6,870,614
<td style="text-align:right">$12.548,240
<td style="text-align:right">$0
<td style="text-align:right" >$77,667,306
<tr>
<td>FY-2019
<td style="text-align:right">$43,717,712
<td style="text-align:right">$15,884,418
<td style="text-align:right">$1,114,263
<td style="text-align:right">$6,637,959
<td style="text-align:right">$14,719,873
<td style="text-align:right">$0
<td style="text-align:right" >$82,073,325
<tr>
<td>FY-2018
<td style="text-align:right">$40,444,145
<td style="text-align:right">$4,310,427
<td style="text-align:right">$1,072,077
<td style="text-align:right">$6,348,888
<td style="text-align:right">$7,513,233
<td style="text-align:right">$0
<td style="text-align:right">$59,688,770
<tr>
<td>FY-2017
<td style="text-align:right" >$39,505,894
<td style="text-align:right">$3,829,758
<td style="text-align:right">$1,561,282
<td style="text-align:right">$5,909,352
<td style="text-align:right">$8,864,342
<td style="text-align:right">$0
<td style="text-align:right">$59,670,628
<tr>
<td>FY-2016
<td style="text-align:right" >$37,950,289
<td style="text-align:right">$4,687,929
<td style="text-align:right">$1,360,397
<td style="text-align:right">$5,453,383
<td style="text-align:right">$7,230,989
<td style="text-align:right">$0
<td style="text-align:right">$56,682,988
<tr>
<td>FY-2015
<td style="text-align:right" >$37,368,409
<td style="text-align:right">$3,652,154
<td style="text-align:right">$1,336,002
<td style="text-align:right">$5,037,893
<td style="text-align:right">$7,239,560
<td style="text-align:right">$0
<td style="text-align:right">$54,635,018
<tr>
<td>FY-2014
<td style="text-align:right" >$33,571,938
<td style="text-align:right">$3,773,082
<td style="text-align:right">$1,269,387
<td style="text-align:right">$4,863,720
<td style="text-align:right">$6,952,691
<td style="text-align:right">$0
<td style="text-align:right">$50,430,818
<tr>
<td>FY-2013
<td style="text-align:right" >$33,064,087
<td style="text-align:right">$3,102,385
<td style="text-align:right">$1,078,411
<td style="text-align:right">$4,674,442
<td style="text-align:right">$6,797,095
<td style="text-align:right">$0
<td style="text-align:right">$48,666,420
<tr>
<td>FY-2012
<td style="text-align:right" >$32,623,085
<td style="text-align:right">$3,088,256
<td style="text-align:right">$1,096,186
<td style="text-align:right">$4,796,584
<td style="text-align:right">$9,780,637
<td style="text-align:right">$0
<td style="text-align:right">$51,384,748
<tr>
<td>FY-2011
<td style="text-align:right">$31,748,443
<td style="text-align:right">$4,108,186
<td style="text-align:right">$995,415
<td style="text-align:right">$4,741,621
<td style="text-align:right">$4,780,811
<td style="text-align:right">$0
<td style="text-align:right">$46,374,476
<tr>
<td>FY-2010
<td style="text-align:right">$31,527,659
<td style="text-align:right">$5,434,495
<td style="text-align:right">$1,041,471
<td style="text-align:right">$4,278,903
<td style="text-align:right">$6,678,071
<td style="text-align:right">$715,000
<td style="text-align:right">$49,675,599
<tr>
<td>FY-2009
<td style="text-align:right">$30,187,604
<td style="text-align:right">$4,043,775
<td style="text-align:right">$914,311
<td style="text-align:right">$4,047,949
<td style="text-align:right">$8,198,354
<td style="text-align:right">$1,430,000
<td style="text-align:right" >$48,821,993
<tr>
<td>FY-2008
<td style="text-align:right">$28,344,427
<td style="text-align:right">$6,401,744
<td style="text-align:right">$997,316
<td style="text-align:right">$4,138,211
<td style="text-align:right">$6,687,716
<td style="text-align:right">$1,430,000
<td style="text-align:right" >$46,999,000
<tr>
<td>FY-2007
<td style="text-align:right">$27,123,219
<td style="text-align:right">$2,677,793
<td style="text-align:right">$1,055,233
<td style="text-align:right">$5,203,902
<td style="text-align:right">$4,205,095
<td style="text-align:right">$1,430,000
<td style="text-align:right">$41,695,242
<tr>
<td>FY-2006
<td style="text-align:right">$24,992,543
<td style="text-align:right">$3,124,688
<td style="text-align:right">$1,497,895
<td style="text-align:right">$4,797,895
<td style="text-align:right">$4,472,246
<td style="text-align:right">$1,406,132
<td style="text-align:right" >$40,291,469
<tr>
<td>FY-2005
<td style="text-align:right">$24,474,710
<td style="text-align:right">$3,039,970
<td style="text-align:right">$827,277
<td style="text-align:right">$4,454,258
<td style="text-align:right">$3,118,356
<td style="text-align:right">$1,392,296
<td style="text-align:right" >$37,306,867
<tr>
<td>FY-2004
<td style="text-align:right">$22,631,504
<td style="text-align:right">$3,124,800
<td style="text-align:right">$845,391
<td style="text-align:right">$4,192,543
<td style="text-align:right">$3,375,187
<td style="text-align:right">$1,430,000
<td style="text-align:right">$35,559,081
<tr>
<td>FY-2000
<td style="text-align:right">$15,990,745
<td style="text-align:right">$1,587,290
<td style="text-align:right">$718,686
<td style="text-align:right">$1,531,536
<td style="text-align:right">$2,691,719
<td style="text-align:right">$725,000
<td style="text-align:right">$23,244,976
</tbody>
</table>jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-62720960907219968562022-10-31T18:31:00.401-04:002022-11-03T10:50:12.108-04:00Threat from OLR to Trash Older City Retirees Health Insurance<p>
On October 27, 2022, there were oral arguments in the appellate court for the trial court decision stopping the City from charging retired city workers for their supplemental Medicare insurance. It appeared that the appellate court would defer to the City Council over the wording of Section 12-126 which would leave standing the trial court decision.</p>
<p>
On October 28, 2022, the City's OLR director sent the Municipal Labor Committee (MLC) a <a href="https://drive.google.com/file/d/1Hgbc8yfcHI_ZweDpTYrKFaUSo1F7KAXA/view?usp=sharing">letter</a> threatening to terminate all existing health insurance contracts for all older city retirees (I am assuming that the City did not mean younger retirees) and leave the older retirees with only a Medicare Advantage plan for which the City doesn't have to pay anything.</p>
<h3>"MAP" Plan</h3>
<p>In her letter the OLR director refers to the "MAP" plan indicating that she and the MLC have a "MAP" plan ready to go. For the record, since Anthem has withdrawn from its offering to provide a Medicare Advantage plan, OLR has not given public notice about what constitutes the "MAP" plan. There may be a new "MAP" plan but we don't know anything about it.</p>
<p>NYC retirees live all over the United States. That is why traditional Medicare with supplemental insurance works so well for NYC retirees. Medicare is almost universally accepted across the country. Medicare coverage with supplemental insurance provides the best health care for older retirees who statisically have more health problems than younger retirees. Preversely, the younger retirees cost the City more than the older retirees.</p>
<p>I know that contracts between Medicare (CMS) and insurance companies offering Medicare Advantage plans are regionally based. I suspect that to provide the same plan on a national basis is not really possible.</p>
<h3>Attack on Section 12-126</h3>
<p>
The OLR director also stated in the letter that she and the MLC had agreed via collective bargainning to changes to Section 12-126 of the NYC Admin Code which would eliminate the health insurance protections for older city retirees. She was complaining that these changes have not yet been introduced at the City Council. The proposed changes, however, are floating around and are <a href="http://nycers-info-murphy.blogspot.com/2022/10/assault-on-law-protecting-city-retirees.html">dangerous</a>.</p>
<p>The OLR director claims that the City is losing $50M per month paying for the supplemental Medicare insurance for older city retirees because the changes have not been passed into law. The City paid $425M for supplemental insurance in FY-2022. Divided by 12, that is $35.4M per month. This type of inaccuracy is always indicative of deception.
<p>
In fact the City is not losing money. It is continuing to honor the committment that it made in 1965 and memorialized in statute in 1967.</p>
<p>There were 246,832 city retirees in 2022 of which 173,231 were Medicare eligible. Of that number 139,442 were covered by the supplemental insurance. The City wants to terminate their supplemental insurance and only offer a Medicare Advantage plan with an exclusionary drug rider that the retiree would have to pay for.</p>
<h3>Talk about Losing Money</h3>
<p>
On October 31, 2022, the Comptroller released the FY-2022 NYC Financial Statement (CAFR).</p>
<p>The statement documents that in 2022 the City contributed $3.03B to the teachers' pension fund (TRS) and in turn TRS skimmed off $2.14B into the teachers' deferred compensation plan (403-b). Yes, it is mind boggling but legal. The 2021 skim was $1.99B.</p>
<p>The UFT is the dominant player at TRS. The UFT is also the main union pushing the "MAP" scam on the other unions.</p>
<p>The CAFR also documents that the City paid $1.42B to the union welfare funds in 2022. The 2021 amount was $985M. The City paid $126M to the union annuity funds in 2022 and $109M in 2021.</p>
<h3>Conclusion</h3>
<p>
Let's hope the City Council stands by its 1967 committment to provide health insurance to the City's workers and retirees and not dump older retirees into a second rate private insurance plan.jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-11070929989151911082022-10-02T15:44:00.011-04:002023-01-04T11:58:41.065-05:00Assault on the Law Protecting City Retirees' Health Insurance - Blowing Up Section12-126<script type="text/javascript">
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<p>
</p><h2>Below is a graph of the City's FY-2022 expenses of $7.6B for health insurance for employees and retirees, both younger and Medicare eligible.</h2>
<div class="separator" style="clear: both;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtint8rBaj4fAHfwLR7HuIQ8NW4mQtIRugAxjsmqC_NZrJHFlQUirCCNFrzACY7bA8UpKyQ-PBES0CzlbCCZuOh2abwvxuvzkDI6ILO3ZS5k7wBamiin3Ipar4_wk0RZrM2QEB_F2R_aiie9z1sgyAG3In5vcBk9fySDYEUKxBaECoDsnK14hgcQ/s2192/Pie%20Chart%20HI%20Costs%20FY-2022.jpg" style="clear: left; display: block; float: left; padding: 1em 0px; text-align: center;"><img alt="" border="0" data-original-height="1749" data-original-width="2192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtint8rBaj4fAHfwLR7HuIQ8NW4mQtIRugAxjsmqC_NZrJHFlQUirCCNFrzACY7bA8UpKyQ-PBES0CzlbCCZuOh2abwvxuvzkDI6ILO3ZS5k7wBamiin3Ipar4_wk0RZrM2QEB_F2R_aiie9z1sgyAG3In5vcBk9fySDYEUKxBaECoDsnK14hgcQ/s400/Pie%20Chart%20HI%20Costs%20FY-2022.jpg" width="400" /></a></div>
<div class="separator" style="clear: both;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuAlfjoViuYk-NfP5R-7MRZztElL8UvR8XCC4C1HWOv2F00oLv0vefnALguaxe-L-vs7TUmEuJyO827SyFNPuFXWaPqEQPelQKx29KqyqqyVARSvnhFolfo1-5V7C6Vir5WwsvjXAhkaJEJXQXjOyZsB3O-KEZcvnB5NYur2YPy6R-dWVBbjD4uQ/s1608/Pie%20Chart%20HI%20Contracts%20FY-2022.jpg" style="clear: right; display: block; float: right; padding: 1em 0px; text-align: center;"><img alt="" border="0" data-original-height="1225" data-original-width="1608" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuAlfjoViuYk-NfP5R-7MRZztElL8UvR8XCC4C1HWOv2F00oLv0vefnALguaxe-L-vs7TUmEuJyO827SyFNPuFXWaPqEQPelQKx29KqyqqyVARSvnhFolfo1-5V7C6Vir5WwsvjXAhkaJEJXQXjOyZsB3O-KEZcvnB5NYur2YPy6R-dWVBbjD4uQ/s400/Pie%20Chart%20HI%20Contracts%20FY-2022.jpg" width="400" /></a></div>
<br clear="left" />
<p><br>
<p>
<p> As laid out in the two charts above the health insurance cost for retirees covered by Medicare is only 12% of the City's costs but represent 31% of the people covered. Yet these are the people that the City and the city unions chose to <a href="https://nycers-info-murphy.blogspot.com/2022/05/harry-nespoli-and-bob-linn-both-knew.html">attack</a> in 2021 because they did not have anyone to stand up for their rights during collective bargainning.
</p>
<p>
Just to be clear the City and the unions are not partial to younger retirees. It is just that they can not attack the health benefits of younger retirees without damaging the benefits of active employees. Employees and not retirees vote in union elections. The heads of the UFT and DC-37 are paid more than the Mayor. You don't want to lose a union election.
<p>
But the Medicare retirees did not take this attack laying down. They fought back in court and won. So now in 2022 the City and the city unions are attacking the law that protected the health insurance benefits of Medicare retirees, Section 12-126 of the NYC Administrative Code.
</p>
<h2> Section 12-126</h2>
<p>
Most city retirees with Medicare have a supplemental insurance from GHI called Senior Care. This is a different insurance coverage from the GHI coverage (GHI-CBP) that city employees and younger retirees have from the City.
<ul><li>GHI-Senior Care costs the City $199.06 per month per indivdual <li>while GHI-CBP costs $925.85 per month per indiviual.
<li>The City's cost for families of employees and younger retirees is $2,270.45 per month <li>while the City's cost for dependents of retirees with Medicare is $199.06 per month for each dependent.
</ul>
<p>
Section 12-126 mandates that the City pay for health insurance coverage for city employees, city retirees and their dependents up 100% of the HIP-HMO rate. It was passed into law in 1967 along with authorization for the City to refund $3 a month to retirees for their Medicare Part B premium.
</p><p>
It has been modified over the years to increase the Part B refund as the Part B premium increased, until in 2001 the refund was made equal to whatever the Part B premium was. Also in 2001 there was another modification which changed the service rquirement for city retirees. It was raised to 10 years from 5 years. This change, however, only applied to to new employeees hired on or after December 27, 2001. All current employees and retirees were grandfathered into the 5 year service requirement.
</p>
<h2>Proposed Changes</h2>
<p>
Now the City and the city unions (MLC) want to put in place multiple cost caps to go along with the the 100% HIP cost cap. Thses alternative caps would be tied into specific groups made up of employees, retirees, and dependents. The changes would apply to all current employees and retirees. See the wording of the proposed legislative change below.
</p>
<p>Remember that the City's and the MLC's main objective is to pay nothing for the supplmental health insurance for city retirees covered by Medicare. They then want to funnel the money saved into the MLC's welfare funds. They want to rip all these Medicare retirees out of Medicare and force them into a Medicare Advantage plan. You know what Medicare Advantage plans are, the garbage plans that Joe Namath and Jimmy Walker are selling on TV. Everyone knows this is a scam but there doesn't seem to be any concern for the truth when money is involved.
<h3>Back Room Change</h3>
<p>
The bizarre aspect of this change is the City and the MLC are proposing a very convoluted wording to get what they want. Instead of saying straight out that from now on retirees covered by Medicare will have to pay for their supplemental coverage and be done with it, they are pushing a back room process where the City and the MLC can craft any arbitary group of employees, retirees, and dependents, then pick an associated coverage plan (health insurance???) for the group, and adopt the plan's cost as the cost cap for the arbitrary group's health insurance coverage.
<h3>Increased Liability</h3>
<p>
There is a huge risk with this change. Forget that the City and the MLC want to hammer older retirees. This wording could create an unlimited cost liability for the City. Once a plan has been chosen for a given group, the City has to pay the cost of that plan no matter what it is. Costs always go up not down.
</p>
<h3>Two Caps and No Decision</h3>
<p>
In addition to the upside risk, this proposed change puts in place two caps for these new plans, the HIP-HMO cap and the actual cost of the plan but provides no decision process for giving control to either of the cost caps. This is an open invitation for abuse on the City's part. I am suspicous of why the City did not make this issue clear. You would think that City would want to avoid litigation on this issue but with this vagueness, the City could do whatever it wants unless challanged in court.
<p>
<h2>"any class of individuals eligible for coverage by a plan jointly agreed upon by the city and the municipal labor committee to be a benchmark plan for such class"</h2>
<p>
Again, this is language with legislative problems. What are the possible classes? Who are the individuals eligible for coverage?
<p>
What coverage? The assumption is health insurance but why was it not specifically stated? Is this an attempt to add new benefits to the guarantee? In fact, the term "health insurance coverage" is a defined term in the statute and is what the statute guarantees not a undefined term, "coverage". <blockquote>The definition is "A program of hospital-surgical-medical benefits to be provided by health and hospitalization insurance contracts entered into between the city and companies providing such health and hospitaliaztion insurance." </blockquote>
<p>
Who is the municipal labor committee? Who controls the MLC? Is the MLC accountable to the voters of NYC? The MLC may represrnt city employees but it does not represent current city retirees. City retirees are private citizens, many of them living outside of New York City. They are not involved in collective bargainning.
<p>
How does the City and the MLC jointly agree upon a plan to be a benchmark for a class of individuals? The last time the City and the unions agreed upon a benchmark was in 1965 and it included all city employees, city retirees, and their dependents in the class. It included the choice to three plans, GHI, HIP, and Blue Cross/Blue Shield. All three were capped at the HIP costs. This was also the first time retirees were given health insurance benfits by the City. Since there was an initial associated monthly cost for retirees, they were given the choice of participating in the coverage. This was done as part of a collective bargainning process.
<p>
in 1967, Section 12-126 gave <b><i>statutory</i></b> protection for health insurance coverage to city retirees.
<p>Will the new proposed selection process be open to the public or will it be a back room deal made without accountablity?
<p>
Most city retirees now have their health benefits with GHI (85%) and HIP (12%). This is roughly true for both younger retirees and those covered by Medicare. Employees also use mostly GHI(70%) and HIP(24%). Both these plan are provided by EmblemHealth. They were originally separate but merged in 2005. The City paid approximately 90% of the $7.6B to Emblemhealth in FY-2022.
<h2>Politics</h2>
<p>
As I previously stated, the City could have proposed a direct change the law to stop paying for older city retirees but the City didn't. There may be age discrimination issues with hammering older retirees.
<p>
Of course this may all be about politics. To make any change to Section 12-126 the City Council has to adopt the change. That means the City needs to have the unions' backing for the change to get the necessary votes from the City Council members. It is reasonable to conclude that the strange wording is the result of political deals between the City and the MLC. At no point were the city retirees allowed to defend their interests and good luck to the taxpayers.
<h2>Wording of the Proposed Change for Section 12-126 NYC Administrative Code </h2>
<p>
The City and the MLC are proposing the following legislative changes:
<blockquote>
<p>
Section 12-126(b)
</p><p>
(1) The city will pay the entire cost of health insurance coverage for city employees, city retirees, and their dependents, not to exceed one hundred percent of the full cost of H.I.P.-H.M.O. on a category basis</p><p><i><b>, or in the alternative, in the case of any class of individuals eligible for coverage by a plan jointly agreed upon by the city and the municipal labor committee to be a benchmark plan for such class, not to exceed the full cost of such benchmark plan as applied to such class</b></i>. </p><p>Where such health insurance coverage is predicated on the insured's enrollment in the hospital and medical program for the aged and disabled under the Social Security Act, the city will pay the amount set forth in such act under 1839(a) as added by title XVIII of the 1965 amendment to the Social Security Act;…
<p> Specifically
<blockquote>
Not to exceed one hundred percent of the full cost of H.I.P.-H.M.O. on a category basis
,or in the alternative,
<ol>
<li>in the case of any class of individuals
</li><li>eligible for coverage
</li><li>by a plan jointly agreed upon
</li><li>by the city and the municipal labor committee
</li><li>to be a benchmark plan for such class,
</li></ol>
not to exceed the full cost of such benchmark plan as applied to such class.
</blockquote>
</blockquote>jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-43858968618388173302022-06-27T12:25:00.001-04:002023-09-14T14:47:20.834-04:00FY-2023 NYCERS Budget Update
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<p>
In June of 2017, I wrote post about NYCERS's budget history and a recent explosion of spending. Since then the growth of budget has lost all touch with reality. I have added new data both current and historical. Currently I do not have access to the records from 1997 to 2004.
<P>
I will let the numbers in the table below speak for themselves.
<p>
Prior to FY-1997, the NYCERS admin budget was part of the overall NYC budget adopted by the City Council.
<p>
In 1996 the state legislature authorized the NYCERS Borad of Trustees to adopted the annual admin budget for NYCERS and to pay all expenses from the assests of the pension fund. From 1997 to 2005 the NYCERS admin budget increased by 294.25%. Most of that increase was in place by 2001, the year the dot-com bubble hit Wall Street. That, in turn, created pressure to keep the growth in the budget below the inflation rate.
<p>
It is reasonable to question the need for such a significant increase in the NYCERS admin budget over this nine year period, if you were not aware of what disparate shape NYCERS was in 1996.
<p>
It is, however, absolutely clear that NYCERS was radicallly well equipped to do its work in 2005, probably far better than any other city agency. As an example, in the aftermath of 9/11 attack, a major division of OMB worked out of the NYCERS's office for over 6 months. They thought they had died and went to heaven.
<p>
The FY-2006 budget was the last budget I prepared before I left NYCERS. It had a 1.4% increase. You will notice in the following year, FY-2007,a significant increase in staff.
<p>
On May 14, 2020 in the midst of the pandemic, the NYCERS's trustees adopted FY-2021 admin budget of $89.7M. Then, on Decemeber 10, 2020, the trustees increased that bduget to $98.3M, an $8.6M increase.
<p>
On April 8, 2021 the trustees adopted the FY-2022 admin budget of $135.7M, a $36.4M increase.
<p>
As of January 1, 2022 most of the publically elelcted trustees on the NYCERS Board of Trustees will be gone. The Mayor, the Comptroller and four of the five Borough Presidents will all be new people. One current Borough President and the Public Advocate wiil probably be on the ballot in November. Most likely,four years from now all of the public trustees who voted for this qusetionable $135.7M budget will be gone.
<p>
On May 12, 2022 the Tustees adopted the FY-2023 Admin Budget with a $10.5M increase (7.78%, previous year it was a 37.94% increase).
<p>
<table width=100%>
<head><style>table, th, td { border: 1px solid black;}</style></head>
<caption><B> History of NYCERS Admin Budget 1980-2023</b></caption>
<colgroup width = "6%" span="4">
</colgroup>
<colgroup width = "12%" span="4">
</colgroup>
<colgroup width = "10%" span="1">
</colgroup>
<tr align = "center">
<th>Fiscal Year
<th>F/T Count
<th>P/T Count
<th>College Aides / Hourly
<th>PS Budget
<th>OTPS Budget
<th>Fringe
<th>Total
<th>% Increase
<tr align = "center">
<td>2023
<td>485
<td>30
<td>16
<td>$43,016,089
<td>$90,436,500
<td>$12,942,144
<td>$146,394,733
<td>7.92%
<tr align = "center">
<td>2022
<td>474
<td>27
<td>16
<td>$38,397,943
<td>$85,531,063
<td>$11,719,465
<td>$135,648,471
<td>37.94%
<tr align = "center">
<td>2021
<td>438
<td>27
<td>16
<td>$36,842,549
<td>$50,210,145
<td>$11,283,945
<td>$98,336,639
<td>7.10%
<tr align = "center">
<td>2020
<td>438
<td>27
<td>16
<td>$35,262,139
<td>$45,862,557
<td>$10,689,350
<td>$91,814,046
<td>4.97%
<tr align = "center">
<td>2019
<td>428
<td>35
<td> 0
<td>$33,592,612
<td>$43,532,302
<td>$10,344,565
<td>$87,469,479
<td>39.44%
<tr align = "center">
<td>2018
<td>411<td>35<td>0
<td>$31,704,410
<td> $21,832,718
<td>$9,194,015
<td>$62,731,143
<td> 3.55%
<tr align = "center">
<td>2017
<td>401<td>35<td>0
<td>$31,056,080
<td> $20,916,796
<td>$8,605,288
<td>$60,578,164 <td> 4.81%
<tr align = "center">
<td>2016
<td>392<td>35<td>0
<td>$30,233,989
<td> $19,407,619
<td>$8,155,517
<td>$57,797,125 <td> 4.70%
<tr align = "center">
<td>2015<td>392<td>5<td>30
<td>$29,131,972
<td> $18,154,572
<td>$7,915,476
<td>$55,202,020 <td> 3.68%
<tr align = "center">
<td>2014<td>383<td>5<td>30
<td>$26,813,635
<td> $18,761,240
<td>$7,669,819
<td>$53,244,694 <td> 2.18%
<tr align = "center">
<td>2013
<td>380<td>5<td>20
<td>$26,623,635
<td> $17,951,822
<td>$7,532,499
<td>$52,107,956 <td> 1.93%
<tr align = "center">
<td>2012
<td>372<td>12<td>0
<td>$25,756,827
<td> $18,781,428
<td>$6,603,649
<td>$51,122,139 <td> 1.14%
<tr align = "center">
<td>2011
<td>372<td>12<td>0
<td>$26,046,827
<td> $18,492,228
<td>$6,006,573
<td>$50,545,628 <td> 2.76%
<tr align = "center">
<td>2010
<td>372<td>12<td>0
<td>$26,046,827
<td> $17,777,228
<td>$5,362,640
<td>$49,186,695 <td> 1.88%
<tr align = "center">
<td>2009
<td>371<td>13<td>0
<td>$25,189,842
<td> $18,208,861
<td>$4,879,903
<td>$48,278,606 <td> 6.22%
<tr align = "center">
<td>2008
<td>371<td>13<td>0
<td> $23,597,857
<td> $17,259,313
<td>$4,799,066
<td>$45,656,236 <td> 10.80%
<tr align = "center">
<td>2007
<td>364<td>13<td>0
<td> $22,616,783
<td> $14,258,471
<td>4,375,788
<td>$41,251,042 <td> 5.73%
<tr align = "center">
<td>2006
<td>342<td>13<td>30
<td> $20,255,911<td> $14,683,855 <td>$ 4,076,823
<td>$39,016,589 <td> 1.01%
<tr align = "center">
<td>2005
<td>342
<td>13
<td>30
<td> $19,737,687
<td> $14,851,355
<td>$3,887,624
<td>$38,476,666
<td>295.25%
<tr align = "center">
<td>****
<td>
<td>
<td>
<td>
<td>
<td>
<td>
<td>
<tr align = "center">
<td>1980
<td>219<td>0<td>0
<td>$3,558,977
<td>$1,079,851
<td>na
<td>$4,638,828
<td> na
<tr align = "center">
<td>1981
<td>222<td>0<td>0
<td>$3,507,806
<td>$1,020,374
<td>na
<td>$4,528,180
<td> -2.39%
<tr align = "center">
<td>1982
<td>220<td>0<td>0
<td>$3,970,212
<td>$1,177,
748
<td>na
<td>$5,147,960
<td>13.69%
<tr align = "center">
<td>1983
<td>224<td>0<td>0
<td>$4,429,362<td>$1,230,672
<td>na
<td>$5,660,034
<td>9.95%
<tr align = "center">
<td>1984
<td>231<td>0<td>0
<td>$5,026,847
<td>$1,194,237
<td>na
<td>$6,221,084
<td>9.91%
<tr align = "center">
<td>1985
<td>239<td>0<td>0
<td>$5,446,600
<td>$1,241,976
<td>na
<td>$6,688,576
<td>7.5%
<tr align = "center">
<td>1986
<td>247<td>0<td>30
<td> $5,916,793
<td> $1,423,743
<td>na
<td> $7,340,536
<td> 9.76%
<tr align = "center">
<td>1987
<td>245<td>0<td>30
<td> $6,621,803
<td> $1,881,300
<td>na
<td> $8,167,220
<td>11.26%
<tr align = "center">
<td>1988
<td>265<td>0<td>30 <td> $6,621,803<td> $1,881,300<td> na
<td> $8,503,103
<td>4.11%
<tr align = "center">
<td>1989
<td>285<td>0<td>30
<td> $7,849,731
<td> $1,932,351
<td> na
<td> $9,782,082
<td>15.4%
<tr align = "center">
<td>1990<td>280<td>0<td>30
<td> $8,284,883<td> $2,578,693<td> na
<td> $10,863,576
<td>11.06%
<tr align = "center">
<td>1991<td>229<td>0<td>30
<td> $6,826,473<td> $2,475,205<td> na
<td> $9,301,678
<td>-14.38%
<tr align = "center">
<td>1992<td>225<td>0<td>30
<td> $6,646,549<td> $2,216,262<td> na
<td> $8,862,811
<td>-4.72
<tr align = "center">
<td>1993
<td>223<td>0<td>30 <td> $6,858,991<td> $2,198,882<td> na
<td> $9,057,873
<td>2.20%
<tr align = "center">
<td>1994
<td>194<td>0<td>30 <td> $6,778,541<td> $2,183,101<td> na
<td> $8,961,642
<td>-1.06%
<tr align = "center">
<td>1995
<td>167<td>0<td>30
<td> $6,202,062<td> $2,080,504<td> na
<td> $8,282,566
<td>-7.58%
<tr align = "center">
<td>1996
<td>154<td>0<td>30
<td> $6,199,709
<td> $2,573,715
<td> na
<td> $8,773,424
<td>5.93%
<tr align = "center">
<td>1997
<td>200<td>0<td>30<td><td><td><td><td>
<tr align = "center">
<td>1998<td>230<td>0<td>30<td><td><td><td><td>
<tr align = "center">
<td>1999<td>270<td>0<td>30<td><td><td><td><td>
<tr align = "center">
<td>2000<td>290<td>0<td>30<td><td><td><td><td>
<tr align = "center">
<td>2001<td>320<td>13<td>30<td><td><td><td><td>
<tr align = "center">
<td>2002<td>320<td>13<td>30<td><td><td><td><td>
<tr align = "center">
<td>2003<td>334<td>13<td>30<td><td><td><td><td>
<tr align = "center">
<td>2004<td>334<td>13<td>30<td><td><td><td><td>
</table>
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-91891598343937473002022-05-15T15:07:00.058-04:002022-05-16T11:03:33.260-04:00Harry Nespoli and Bob Linn, Both Knew All Along - The Medicare Advantage Scam<script type="text/javascript">
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<p>
<h2>1965</h2>
<p>
In 1965, the City agreed to pay for both employees and retirees health insurance coverage. Dependents were also included. As part of this coverage the City also agreed to offer employees and retirees a choice of three plans,
<ul><li>HIP/Blue Cross,
<li>GHI/Blue Cross, and
<li>Blue Cross/Blue Shield.</ul>
The cost, however, was capped
<ul><li>at 75% of the cost of HIP/Blue Cross(21 day plan) on category basis as of 1/1/1966 for employees and 4/1//1966 for retirees and
<li>at 100% effective on 1/1/1967 for employees and 4/1/1967 for retirees.</ul>
<p>
<h2>1966</h2>
<p>
As of 7/1/1966 Medicare became effective and radically reduced the cost for the City in providing health insurance coverage to eligible retirees, roughly by three quarters.
<p>
The three health plans were significantly changed to reflect the fact that Medicare was now the primary health insurance coverage for retirees over the age of 65.
<p>
As opposed to the three City plans Medicare is an individual coverage plan. It does not administer family plans.
<p>
In order to control the costs of the three new modified contracts, the City adopted the new GHI plan premium as the new 100% cost cap for the three reduced coverage plans for this group of retirees.
<p>
As support for this claim, I am going to quote a statement from a 1997 letter from the OLR Director Jim Hanley to Deputy Mayor Randy Levine:
<blockquote>“The rate paid by the City for Medicare eligible retirees is based on the GHI/Blue Cross Senior Care rate, traditionally the rate is paid retroactively when the Senior Care rate is approved by the City. The rate approved for senior care is $88.65 per month and the HIP rate is $91,31, resulting in a payroll deduction of $2.96 per person.”</blockquote>
<p>
<h2>1967</h2>
<p>
In December 1967, the City Council passed Local Law 120 (Section 12-126, NYC Admin Code) which codified the 100% guarantee for all employees, retirees and dependents. The law only referenced the HIP/ Blue Cross cost cap that was being used for employees and retirees under age 65.
<p>It also authorized the refund of the then current Medicare Part B premiums to Medicare enrolled retirees. The City had required retirees to enroll in Medicare if eligible in order to recive City health insurance coverage. This was actually the primary purpose of the statute.
<p>
<h2>2014 Collective Bargainning</h2>
<p>
In 2014, as part of collective bargaining negotiations the City put forward a list of fourteen proposals to create health insurance savings. Two of the those items are listed below:
<blockquote>
<ul>
<li>
10. Eliminate GHI Senior Care premiums for Medicare plans. Replace with a set rate which can be indexed each year based on Medical CPI or a Medicare Advantage plan.
<li>
11. Eliminate HIP HMO as the benchmark. Replace with a set rate which can be indexed each year on Medical CIPI
</ul>
<p>Note: as of 2014, the City was offering Medicare Advantage plans to retirees but with deceasing participation from retirees.
</blockquote>
<p>
On May 14, 2014, Harry Nespoli and Bob Linn signed a letter of agreement that included the following clause:
<blockquote>
“6. The following initiatives are among those that the MLC and the City could consider in their joint efforts to meet the aforementioned annual and four-year cumulative savings figures: minimum premium, self-insurance, dependent eligibility verification audits, the capping of the HIP HMO rate, the capping of the Senior Care rate, the equalization formula, marketing plans, Medicare Advantage, and the more effective delivery of health care.”
</blockquote>
<p>
It is clear from these documents that Nespoli and LInn knew that the City was obligated to cover the cost of GHI Senior Crae for Medicare retirees. It is also clear that the Law Department knew about the GHI in spite of its court filings to the opposite.
<h2>2021 and the Fight over the Scam</h2>
<p>
So instead of directly attempting to modify Section 12-126 to provide the City with some financial relief from rising health insurance costs, Nespoli and Linn came up with the "MAP" scam.
<p>
Mediacare (CMS) allows an employer to auto-enroll its retirees into a Medicare Advantage plan but requires the empoyer to allow the retirees to stay in their existing plan if they choose to do so. So Nesploi and Linn decide to force GHI Senior Care retirees into a Medicare Advantage plan. But then in clear violation of Section 12-126 they demanded that the retirees pay the full cost of GHI Senior Care if they opted out of the the Meidicare Advantage plan.
<p>
In more direct language, Nespoli and Linn cut retirees health coverage and then tried to extorted the full cost of the old coverage from the retirees opting out. They would have gotten away with this, if the retirees had not fought back and a judge saw the theft for what it was. His words are below:
<blockquote>
Of course, none of this is to say that the respondent must give retirees an option of plans, nor that if the plan goes above the threshold discussed in NYC Admin. Code § 12-126 (b)(1) that the respondent could not pass along the cost above the threshold to the retiree; only that if there is to be an option of more than one plan, that the respondent may not pass any cost of the prior plan to the retirees, as it is the Court’s understanding that the threshold is not crossed by the cost of the retirees’ current health insurance plan. This is buoyed by the fact that the current plan has been paid for by the respondent in full to this point.
</blockquote>
<p>
Of course the City has the nerve to appeal this decision in spite of the fact that the City knew all along that it was using GHI Senior Care as the cost threshold.
<p>
Yes, it is as bad as it sounds.
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-81006750799103588192022-04-09T13:29:00.013-04:002022-05-09T16:21:06.048-04:00The Phantom $600M and the Medicare Advantage Scam - Update<script type="text/javascript">
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<p>
<h2>Phantom $600M</h2>
<p>
As the details about the Medicare Advantage scam have become clearer, one number keeps popping up, the $600M that the City is claiming it is going to save by ramming all the old retirees into a “Joe Namath” Medicare plan. The City, however, is not going to save anything. It is giving the money to the Health Insurance Stabilization Fund which is committed to city workers and pre-Medicare retirees. This is clearly a discriminatory benefits structure excluding Medicare retirees. The Fund is controlled by the city unions and the City. The NYC taxpayers have no control.
<p>
In addition, it appears that the $600M is an inflated number. As of June 30, 2021, there were 243,978 retirees that are eligible for city funded health insurance.
<h3>The Actuary's FY-2021 Retirees Benefit Report </h3>
<p>
As reported by the NYCERS Actuary in her 2021 Other Post Employment Benefits (OPEB) report, this number breaks down into two main parts, 72,962 non-Medicare eligible participants (plus 46,483 spouses) and 171,016 Medicare eligible participants (plus 60,602 spouses).
<p>
The City saves nothing with respect to the 72,962 participants. They are not yet part of the scam. Their turn will come later.
<p>
The 171,016 Medicare retirees breaks down into four coverage groups:
<ol><li>
GHI Senior Care 137,755
<li> HIP VIP Medicare Advantage 18,127
<li> Other (mostly Medicare Advantage) 6,905
<li> Waived Coverage 8,229
</ol>
<p>
Note: Emblemhealth controls both GHI Senior Care and HIP VIP as well as their companion products for workers and pre-Medicare retirees. The "Other" catergory is made up of an Aetna Medicare Advantage plan plus other minor carrires both Medicare Advanatge and Medicare Supplement plans.
<p>
Obviously, the City has never paid anything for the waived class. So, there are no new savings there.
<h3>HIP-VIP and the $7.50 Premium</h3>
<p>
The HIP and Aetna plans are strange situations. Out of the blue as of January 1, 2022 the City is only paying $7.50 per month per retiree for these two plans. Participants can stay in these plans with no change in their zero monthly premiums, but the City has been able to cut its cost from $184.95 and $204.53 per month to $7.50 with these two vendors. This is a real magic trick, the same coverage for almost no charge. Why didn’t the City do this years ago? Assuming all the "Other" class is covered by Aetna, this change produces a $54.96M annual savings.
<ol>
<li> 18,127 * ($184.95 - $7.50) * 12 = $38.60M
<li> 6,905 * ($204.95 - $7.50) * 12 = $16.36M
</ol>
<p>
The City has already started saving this $54.96M as of January 1, 2022. They have not been open about this savings but HIP and Aetna may back off their reductions after evaluating the court decision.
<h3>The GHI Senior Care Scam</h3>
<p>
Finally, let’s look at the big GHI Senior Care class of 137,755 participants. The coverage for this class is a Medicare supplemental insurance plan on top of traditional Medicare. If the participants in this class, however, want to keep their current coverage, the City is shifting $191.57 of its $199.07 per month cost to the retirees and their dependents. Prior to the court decision the City was planning to pay $7.50 per month for the GHI Senior Care plan. This is exactly the same amount that the City will be paying for the “Joe Namath” MAP plan being run by Emblemhealth and Anthem but only for the first year of the five year contract. The following years were going to be free.
<p>
This shift in costs would create a $316.68M annual savings (137,755 * ($199.07 - $7.50) * 12 = $316.68M) for the retirees.<br>
<p>
Assuming that 67% of the spouses are covered by GHI Senior Care, also charging each of the spouses $191.57 creates a $91.95M annual savings (40,000 * ($199.07 - $7.50) * 12 = $91.95M).
<p>
In total, this creates a possible $463.599M annual savings ($54.96M + $316.68 + $91.95M). This is far short of the $600M. How did the City get this number so wrong?
<h3>Failed Strategy</h3>
<p>
In closing, the City has been very secretive about the internal costs figures for the Medicare Advantage scam. I suspect that the City was afraid that this information would expose what the City was doing with Emblemhealth.
<p>
Section 12-126 of the NYC Admin Code requires the City to pay the entire cost of health insurance up to 100% of the full cost HIP-HMO on a category basis. Category basis means individual or family. The City has tried to argue that law considers Medicare a category basis also.
<p>
After reading a 1995 <a href="https://drive.google.com/file/d/14qI21ZFKB60N2rH8nRFhBLXETOvv-1Kt/view?usp=sharing">report</a> on the City's health insurance from the Citizens Budget Committee wriiten with the cooperation of OLR, I discovered that the City has, for many years, been using the GHI Senior Care premium as its cost control for Medicare retirees' health insurance. See the quote below:
<blockquote> The City's contribution for insurance for Medicare-eligible
retirees is set at the premium cost for a GHI
supplemental benefit policy, or $1,104 annually in fiscal
year 1995. The City also pays an equal amount for
coverage for a Medicare-eligible spouse of a retiree. If the
spouse of a retiree is under age 65, the City pays the HIP
rate for individual coverage ($1,780). A retiree and their
spouse must choose the same plan if they are both
Medicare- eligible or a plan from the same carrier if one is
not Medicare-eligible.
</blockquote>
<p>
I was able to match up the COBRA rates and retirees required premiums for six health insurance vendors for 2018, 2020 and 2021. The City started reporting COBRA rates for HIP-VIP in 2021. So 2021 has sven vendors.
<p>
For 2018 the City's cost was $172.42 for all plans, the full amount for GHI Senior Care. In 2020 the City's cost was $189.43. In 2021 the City's cost was $204.53, the full GHI Senior Care cost but the HIP-VIP cost was $184.95. It is clear that the City was using GHI Senior Care as its Section 12-126 cost control plan but was not being very public about it.
<p>
In addition to being deceptive about its cost limit for Medicare retirees, the City in order to circumvent the force of Section 12-126 of the NYC Admin Code had to get the HIP-VIP rate as close to zero as possible. It couldn't be zero because zero contracts are not valid. So the $7.50 rate was born. You see it in both of the Emblemhealth plans, the new MAP plan and the HIP-VIP plan.
<p>
The City only told the court about the new $7.50 premium on March 2, 2022, the day before the court made its decison. After testifying on March 1, 2022 and reviewing that testimony the following day, the City realized that in trying to hide its deal with Emblemhealth, it had also withheld the knowledge of the new $7.50 charge for HIP-VIP and without that knowledge, the court was going to disallow the $191.57 charge to the retirees.
<p>
The City's last minute go for broke strategy failed and the court decided against the City.
<p>
Aetna is a different story. I have another suspecion but it is not strong enough to comment on.
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-14569810040259344672022-04-06T10:26:00.025-04:002022-11-11T16:11:40.099-05:00The Health Insurance Stabilization Fund and the Federal Age Discrimination Law (ADEA - 1967)
<p>
In a previous post about the <a href="http://nycers-info-murphy.blogspot.com/2022/02/the-reason-for-medicare-advantage-scam.html">Medicare Advantage Scam</a> I highlighted a document from OLR to the former Mayor. It went into great detail about the Health Insurance Stabilization Fund, the HISF.
<p>
In 1983 the City and its labor unions agreed to set up the HISF to equalize HIP and GHI insurance rates.
<p>
In 2005 HIP and GHI merged into Emblemhealth.
<h3>The HISF Agreement </h3>
<p>
The following is part of a section from the UFA's 2008-2010 labor contarct with the City that recites the HISF agreement:
</p>
<blockquote>
<p>Section 3.
<p>
A. Effective July 1, 1983 and thereafter, the City's cost for each employee and each retiree under ager 65 shall be qualized at at the community rated basic HIP/HMO plan payment rate as approved by the State department of Insurance on a category basis of individual or family e.g.the Blue Cros/GHI-CBP payment for family coverage shall be equal to the HIP/HMO payment for the family coverage.
<p>
B. If a replacement plan is offereed to employees and retirees under age 65 which exceeds the cost of the HIP/HMO equalization provided in Section 3a, the City shall not bear the additional costs.
<p>
C. The City (and other related Employers) shall continue to contribute on a City employee benefits program-wide basis the additional annual amount of $30 million to maitain the health insurance stabilization reserve fund which shall be used to continue equaliztion and protect the integrity of health insurance benefits.
<p>
The health insurance stabilization reserve fund shall be used: to provide a sufficient reserve; to maintain to the extent possible the current level of health insurance benefits provide under the Blue Cross/GHI-CBP plan; and if sufficient funds are available , to fund new benefits.
<p>
The health insurance stabilization reserve fund shall be credited with the dividends or reduced by the losses attributable to the Blue Cross/GHI-CBP plan.
<p>
Pursuant to paragraph 7 of MLC Healt benefits Agreement, notwithstanding the above in each of the fiscal years 2001 and 2002, the City shall not make the annual $35 million contributions to the health insurance stabilization fund.
</blockquote>
<p>It appears that this agreement violates the federal age discrimination law (ADEA - 1967) by giving a benefit to a subset of a group based only on their age. Why didn't the agreement provide equaliztion for retiree age 65 and older?jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-72188606122423111812022-04-05T12:37:00.002-04:002022-04-06T17:32:45.751-04:00The City’s Failed Attempt to Steal from its Retirees and the Medicare Advantage Scam<script type="text/javascript">
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<p>
NYC Admin Code Section 12-126 requires the City to “pay the entire cost of health insurance coverage for city workers, city retirees, and their dependents, not to exceed one hundred per cent of the full cost of H.I.P.-H.M.O. on a category basis.”. HIP-HMO is a Medicare Advantage plan managed by Emblemhealth. There are also other Medicare Advantage plans offered to NYC retirees. Medicare Advantage plans are not popular with NYC retirees, especially not retired teachers.
<p>
In 2021, the City introduced a new Medicare Advantage plan, <a href="http://nycers-info-murphy.blogspot.com/2022/02/the-reason-for-medicare-advantage-scam.html">the MAP plan</a>, for retirees. The joint vendors for the contract for the new plan were Anthem and Emblemhealth. The only cost to the City for the new plan was a $7.50 monthly charge per participant for the first year of the five-year contract. This new plan was to be mandatory with a federally required opt out process. Part of the opt out, however, was that those retirees (GHI Senior Care) would have to pay $191.57 per month to stay in the GHI Senior Care plan. Prior to 1/1/2022 there was no charge for Senior Care.
<p>
On September 29, 2021, the retirees sued the City.
<p>
As of March 3, 2022, a state judge ordered the City to not charge the retirees the $191.57 monthly premium.
<p>
On the day before, March 2, 2022, the City for the first time notifies the court that Emblemhealth has dropped its monthly charge for HIP-VIP from $184.95 to $7.50 effective Jan. 1, 2022. Prior to 3/2/2022 the City had not notified the court of this reduction.
<p>
In its 3/21/2022 appeal papers the City claims that Emblemhealth did this “to retain market competitiveness”.
<p>
This is not credible because Emblemhealth was already offering the new MAP plan on a no cost basis and the HIP-HMO plan was a closed plan to new retirees. The more credible reason is that this would change the “100% full cost of HIP-HMO” cap and give the City a plausible excuse to start charging the retirees the $191.57 per month for the cost that was above the new HIP-VIP rate.
<p>
Why wait until the night before the court’s decision to reveal the $7.50 charge? I suspect that the City knew that if it had included the $7.50 change in its court filings, that the retirees would have attacked the City for circumventing the intent of the Section 12-126 and it would have exposed the City to credible charges of collusion with Emblemhealth.
<p>
Needles to say the City is trying to expedite its appeal to overturn the judge’s order and circumvent Section 12-126.
jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-13262240533531843602022-02-26T12:14:00.012-05:002022-04-07T14:52:04.796-04:00FY-2021 Update of NYCERS Admin Spending - History<script type="text/javascript">
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<p>
The following is a chart of NYCERS administrative expenses from 2000. The information comes from NYCERS Comprehensive Annual Financial Report. As a point of reference NYCERS had an annual budget of $8.8M in FY-1996, the last year NYCERS was part of the city budget.
<p>
<table border="2" width = "100%">
<caption>NYCERS Admin Expenses</caption>
<colgroup align= "center" span="1" width = "10%">
</colgroup>
<colgroup align = "right" width = "12%" span="1">
</colgroup>
<colgroup align = "right" width = "12%" span="1">
</colgroup>
<colgroup align = "right" width = "12%" span="4">
</colgroup>
<colgroup align = "right" width = "12%" span="1">
</colgroup>
<thead>
<tr>
<td>Fiscal Year</td>
<td>Personnel Expenses</td>
<td>Contracts & Consultants</td>
<td>Phone, Mail, & Printing</td>
<td>Rentals</td>
<td>Software, Hardware, Support, Supplies, & Maintenance</td>
<td>Depreciation & Credits</td>
<td>Total</td>
</tr>
</thead>
<tbody>
<tr>
<td>FY-2021
<td style="text-align:right">$48,693,043
<td style="text-align:right">$14,058,975
<td style="text-align:right">$1,290,546
<td style="text-align:right">$6,617,040
<td style="text-align:right">$16,753,334
<td style="text-align:right">$0
<td style="text-align:right">$87,412,938
<tr>
<td>FY-2020
<td style="text-align:right">$45,736,806
<td style="text-align:right">$11,337,750
<td style="text-align:right">$1,173,896
<td style="text-align:right">$6,870,614
<td style="text-align:right">$12.548,240
<td style="text-align:right">$0
<td style="text-align:right" >$77,667,306
<tr>
<td>FY-2019
<td style="text-align:right">$43,717,712
<td style="text-align:right">$15,884,418
<td style="text-align:right">$1,114,263
<td style="text-align:right">$6,637,959
<td style="text-align:right">$14,719,873
<td style="text-align:right">$0
<td style="text-align:right" >$82,073,325
<tr>
<td>FY-2018
<td style="text-align:right">$40,444,145
<td style="text-align:right">$4,310,427
<td style="text-align:right">$1,072,077
<td style="text-align:right">$6,348,888
<td style="text-align:right">$7,513,233
<td style="text-align:right">$0
<td style="text-align:right">$59,688,770
<tr>
<td>FY-2017
<td style="text-align:right" >$39,505,894
<td style="text-align:right">$3,829,758
<td style="text-align:right">$1,561,282
<td style="text-align:right">$5,909,352
<td style="text-align:right">$8,864,342
<td style="text-align:right">$0
<td style="text-align:right">$59,670,628
<tr>
<td>FY-2016
<td style="text-align:right" >$37,950,289
<td style="text-align:right">$4,687,929
<td style="text-align:right">$1,360,397
<td style="text-align:right">$5,453,383
<td style="text-align:right">$7,230,989
<td style="text-align:right">$0
<td style="text-align:right">$56,682,988
<tr>
<td>FY-2015
<td style="text-align:right" >$37,368,409
<td style="text-align:right">$3,652,,154
<td style="text-align:right">$1,336,002
<td style="text-align:right">$5,037,893
<td style="text-align:right">$7,239,560
<td style="text-align:right">$0
<td style="text-align:right">$54,635,018
<tr>
<td>FY-2014
<td style="text-align:right" >$33,571,938
<td style="text-align:right">$3,773,082
<td style="text-align:right">$1,269,387
<td style="text-align:right">$4,863,720
<td style="text-align:right">$6,952,691
<td style="text-align:right">$0
<td style="text-align:right">$50,430,818
<tr>
<td>FY-2013
<td style="text-align:right" >$33,064,087
<td style="text-align:right">$3,102,385
<td style="text-align:right">$1,078,411
<td style="text-align:right">$4,674,442
<td style="text-align:right">$6,797,095
<td style="text-align:right">$0
<td style="text-align:right">$48,666,420
<tr>
<td>FY-2012
<td style="text-align:right" >$32,623,085
<td style="text-align:right">$3,088,256
<td style="text-align:right">$1,096,186
<td style="text-align:right">$4,796,584
<td style="text-align:right">$9,780,637
<td style="text-align:right">$0
<td style="text-align:right">$51,384,748
<tr>
<td>FY-2011
<td style="text-align:right">$31,748,443
<td style="text-align:right">$4,108,186
<td style="text-align:right">$995,415
<td style="text-align:right">$4,741,621
<td style="text-align:right">$4,780,811
<td style="text-align:right">$0
<td style="text-align:right">$46,374,476
<tr>
<td>FY-2010
<td style="text-align:right">$31,527,659
<td style="text-align:right">$5,434,495
<td style="text-align:right">$1,041,471
<td style="text-align:right">$4,278,903
<td style="text-align:right">$6,678,071
<td style="text-align:right">$715,000
<td style="text-align:right">$49,675,599
<tr>
<td>FY-2009
<td style="text-align:right">$30,187,604
<td style="text-align:right">$4,043,775
<td style="text-align:right">$914,311
<td style="text-align:right">$4,047,949
<td style="text-align:right">$8,198,354
<td style="text-align:right">$1,430,000
<td style="text-align:right" >$48,821,993
<tr>
<td>FY-2008
<td style="text-align:right">$28,344,427
<td style="text-align:right">$6,401,744
<td style="text-align:right">$997,316
<td style="text-align:right">$4,138,211
<td style="text-align:right">$6,687,716
<td style="text-align:right">$1,430,000
<td style="text-align:right" >$46,999,000
<tr>
<td>FY-2007
<td style="text-align:right">$27,123,219
<td style="text-align:right">$2,677,793
<td style="text-align:right">$1,055,233
<td style="text-align:right">$5,203,902
<td style="text-align:right">$4,205,095
<td style="text-align:right">$1,430,000
<td style="text-align:right">$41,695,242
<tr>
<td>FY-2006
<td style="text-align:right">$24,992,543
<td style="text-align:right">$3,124,688
<td style="text-align:right">$1,497,895
<td style="text-align:right">$4,797,895
<td style="text-align:right">$4,472,246
<td style="text-align:right">$1,406,132
<td style="text-align:right" >$40,291,469
<tr>
<td>FY-2005
<td style="text-align:right">$24,474,710
<td style="text-align:right">$3,039,970
<td style="text-align:right">$827,277
<td style="text-align:right">$4,454,258
<td style="text-align:right">$3,118,356
<td style="text-align:right">$1,392,296
<td style="text-align:right" >$37,306,867
<tr>
<td>FY-2004
<td style="text-align:right">$22,631,504
<td style="text-align:right">$3,124,800
<td style="text-align:right">$845,391
<td style="text-align:right">$4,192,543
<td style="text-align:right">$3,375,187
<td style="text-align:right">$1,430,000
<td style="text-align:right">$35,559,081
<tr>
<td>FY-2000
<td style="text-align:right">$15,990,745
<td style="text-align:right">$1,587,290
<td style="text-align:right">$718,686
<td style="text-align:right">$1,531,536
<td style="text-align:right">$2,691,719
<td style="text-align:right">$725,000
<td style="text-align:right">$23,244,976
</tbody>
</table>jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0tag:blogger.com,1999:blog-3639776205470838484.post-64313435736955174972022-02-21T11:07:00.002-05:002022-02-21T11:20:54.037-05:00The Reason for the Medicare Advantage Scam<script type="text/javascript">
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<p>
In a December 27, 2021 memo from the OLR Commissionet to the Mayor (with 4 daya in office),
Ms Campion made the following statement reporting on Health Savings in FY-2021:
<p>
<h2>Memo from OLR to Mayor December 27, 2021</h2>
<blockquote>
Most recently, the Tripartite Committee was tasked with looking at the status of the
Stabilization Fund. An Agreement to set up this Fund was executed in 1983 to help the
City and the MLC equalize the costs of the premium-free CBP-PPO and HIP HMO plans
offered to
<b>active employees and pre-Medicare retirees</b>.
<p>
Under the equalization formula,
when the HIP rate exceeds that of the CBP, the Stabilization Fund receives a contribution
from the City, and when the CBP is higher, the Stabilization Fund has to cover the
increased CBP cost over that of HIP.
<p>
Over the years, by agreement between the City and
the MLC, excess money in the Fund has also been used to cover many of the escalating
costs of health care, including the
<ol>
<li>City’s PICA program (which covers injectable and chemotherapy drugs),
<li>additional contributions to union welfare funds, and
<li>the costs of preventive care mandated by the Affordable Care Act.
</ol>
<p>
In FY 21 and FY 22, the CBP rate
was higher than that of the HIP rate so the Fund will have to cover increased costs,
accelerating the decline of the Stabilization Fund which we had anticipated would occur
in the next few years. This could affect the City’s ability to recover recurring savings from
the CBP plan in the future, as they are derived from offsets to the Stabilization Fund
assets.
<p>
For this reason, the FY 21 withdrawal from the Fund, and therefore the savings,
were limited to $600 million so that any further CBP-derived savings will remain in the
Fund.
<p>
To address the Stabilization Fund, the City and the MLC agreed to implement a new
retiree Medicare Advantage program which is expected to save about <b>$600 million</b> a year
due to Federal subsidization of Medicare Advantage programs. The Medicare Advantage
program will provide NYC retirees with a continuation of premium free coverage while
providing important enhancements including free telehealth visits, transportation
benefits to and from doctor appointments, fitness benefits, meal delivery after a
hospitalization, wellness rewards and coverage while traveling.
<p>
The City and the MLC
agreed to use the savings from that program to help support the Stabilization Fund.
Because this $600 million savings is earmarked for the Stabilization Fund, it does not
count as budget savings towards the FY 19 – FY 21 savings target but was not necessary
to meet the target.
</blockquote>
<p>
<h2>Right Out in the Open</h2>
<p>
The City openly admits that the reason that it is forcing Medicare eligible retirees into a Medicare Advantage plan is so that the City can take money that should used to pay for the retirees health insurance and give it to the Stabilization Fund. The benefit of this transfer goes to employees and non-Medicare eligible retirees and none to Medicare eligible retirees
<p>
It was not done because the Medicare Advantage plan is a better plan than the current GHI Senior Care plan. The City is doing this only because it can walk away from its stautory requirement to pay the entire cost of older retirees health insurance and dump it on the federal government.
<p>
OLR claims that the City is saing $600M because of a federal subsidy. Not exactly. The federal goverment does not subsidize Medicare Advantage plans. Instead of paying 80% of medical costs directly, Medicare gives that same money to private insurance companies to pay 100% of medical costs, admin expenses, and profit. So how do you think an insurance company does that magic trick? Somebody is getting the short end of the stick.
<p>
The MLC has no basis to interfere with current retirees health insurance benefits. The MLC only represent current workers, not current retirees. The fact that the unions control the Stabilzation Fund is an actual conflict of interests.
<p>
In addition, the City <a href="http://nycers-info-murphy.blogspot.com/2022/02/phantom-600m-and-medicare-advantage-scam.html">claims</a> it is going to save $600M per year. It will be lucky to save $375M per year. Of course MAP(Anthem/Eblemhealth) will be increasing its profit tremedously but not as much as it thought since 45,000 retirees have already opted out of the junk MAP plan.
<p>
Just stop and consider that 45,000 retirees have chosen to walk away from the "free" and "better" MAP plan and
are willing to pay the $191.57 per month for their old free plan. Does anyone have any doubt that the MAP plan is junk.
<p>
In fact, Medicare Advantage plans are all schemes by insurance companies to extract money from the Medicare Fund. You only have to consider Anthem's <a href="http://nycers-info-murphy.blogspot.com/2022/02/anthem-us-department-of-justice.html">problem</a> with the Department of Justice over Medicare Advatage fraud.jjpmurphy47http://www.blogger.com/profile/18144722891051657886noreply@blogger.com0