Wednesday, July 28, 2021

July 14, 2021 - Medicare Advantage Plan for Some NYC retirees

On July 14, 2021 the Municipal Labor Council agreed with the City to replace the Emblem Health Senior Care plan with a Medicare Advantage (MA) plan run by Emblem Health/Blue Cross for targeted city retirees eligible for Medicare effective January 1, 2022. The cost of the MA plan will be paid by CSM, the government agency that manages Medicare. The current basic Emblem Health/GHI Senior Care plan will no longer be free.

The retirees had no say in the decision, and it was all done in secret.

The targeted retirees are not being given a choice. Targeted retirees who have signed up for GHI-Senior Care supp plan will be allegedly forced into the new MA plan. The City states that targeted retirees can opt out of the MA plan and stay in your current add on plan but the City will no longer pay the Senior Care basic coverage subsidy.

I find this strange since MA plans are voluntary. I don't see how the City can interfer with a retiree's (and/or his/her spouse's) Part B coverage without the retiree's and/or the spouse's consent. I'm sure The City can offer the MA plan to the targeted retirees but I don't think they can force anyone into it.

As a complication, there are currently 14 City medicare add-on plans, including Senior Care, offered by the City to these targeted retirees, each with the Senior Care subsidy. The City claims it will continue to offer these plans. But effective as of 1/1/2022, I am assuming, the City will no longer be paying the Senior Care subsidy to those plans. The City will have to lay out clearly all the new premiums and any changes in benefits for these plans so that retirees can make an informed decision. The City has alteady cut the benefits for Senior Care as of January 1, 2022.

Wouldn't it be interesting if the City already offered MA plans on voluntary basis? Actually, they do but retirees have not keen on the option.

Targeted City Retirees

Targeted city retirees are Medicare eligible retirees (age 65 or older or receiving SSA disability) who do not have spouses under age 65 or children under age 26. I suspect that this group will total about 55-60% of all city retirees, teachers at higher percent and police/fire at a lower percent.

For example, I estimate that each year 18% of new NYCERS retirees are targeted retirees. Eventually all these retirees will fall under the MA umbrella unless they continue to have beneficiaries outside the scope of Medicare. Slowly over time the percent increases but deaths are always cutting into the total retiree population.

The City will still have to provide regular GHI(CBP) health insurance for non-targeted retirees.

The City's Obligation to Pay for Health Insurance - NYC Admin Code Section 12.126

The mandating statute for health insurance is listed below. It sure appears to me that the City is no longer paying for the health insurance for targeted retirees. I am actually beginning to think that there may be some serious legal issues based on the City's obligation to pay for city retiree's health insurance. Retirees rights are not based on a collective bargainning agreement but a NYC Admin Code section of law.

And it is only older retirees that are being targeted.

Section 12-126.b. Payment of health insurance costs. Except as otherwise provided in section 12-126.1 and section 12-126.2 of this chapter, for city employees, city retirees and their dependents:

* (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.

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;

Quotes from the City's press release

This is a quote from the July 14, 2021 City press release

The NYC Medicare Advantage Plus Program replaces the current Senior Care program, which is a supplement to traditional Medicare, as the program that is free to all retirees. Other buy up options, including the Senior Care plan and the HIP VIP program will remain available to retirees.

It does appear from the press release that Senior Care will still be available but the retiree will have to pay the basic coverage premium which the City has been paying for up till now. That should be an interesting amount. Will it be what the City has been paying or will be jacked up for increased risk that Emblem health will claim?

It appears that the City will also continue to offer the other 13 supplemental plans but without the current subsidy.

Medicare retirees will still be paying for their Part D drug coverage which is most often handled by GHI(CBP) or Senior Care for most Medicare eligible retirees. The new MA plan will offer option of paying for Part D drug coverage.

From the City’s press release:

Retirees will still be eligible for the reimbursement of the Medicare Part B benefit that they receive today.

This means that the City will still be refunding $1,800/yr. to every Medicare retiree and every Medicare covered spouse. I’m assuming the IRMAA premiums will also still be refunded. These can run up to $2,500/yr.

Cost Savings

From the City’s press release:

Implementing the NYC Medicare Advantage Plus Program will produce approximately $600 million annually in health care cost savings for the system. … The City spends over $1 billion a year on retiree benefits, including the Part B Medicare reimbursement, and this will help the City control those costs while improving the quality of care for retirees.

This may be the most critical part of the new plan. This decision is supposed to save the City money while keeping the same level of benefits for the targeted retirees. Retirees, however, will now have $15 copays for all doctor visits.

The savings are created by the City offloading its supplemental health insurance costs to Medicare via the Medicare Advantage program. With the MA plan, the City will not pay for the second level of insurance coverage that it currently provides to targeted city retirees. Medicare will now be paying for that coverage via the MA plan.

Do you get the feeling that Medicare is getting the short end of the stick along with the retirees? What happens if CSM wakes up one morning and sees that every employer is dumping their retiree health care costs on Medicare?

The City does not report what it currently pays for the individual Senior Care premium for basic coverage to Emblem Health for each targeted city retiree. It also doesn’t report the current premium for regular employees and non-targeted city retirees.

I suspect that the City will not report out the details of the new agreement with Emblem Health, the flow of funds from Medicare (CSM) to Emblem Health for this new MA plan, nor Emblem Health’s projected profit from the deal.

On a very basic level a MA plan privatizes Medicare. As such the retiree is dealing with a profit-making insurance company as opposed to CSM, the government entity which runs the Medicare program. Retirees will also be paying $15 copays starting 1/1/2022 both in the MA plan and in Senior care. This is a new cost for retirees for every doctor’s visit. Designed to cut down on visits to the doctor and increase profits. If a retiree chooses to stay with Senior Care, not only will he/she have to pay the basic premium but also the new copays. This is what happens when you are not part of the decision.

Access to Doctors

From the City press release:

A major concern for retirees is whether they can keep their current doctors and hospitals in a NYC Medicare Advantage Plus Program. In the City’s Medicare Advantage Plus Program, a retiree can go to any doctor or hospital that accepts Medicare. It doesn't make a difference if that provider is in the insurer's network or not. As long as the provider takes payment from Medicare, they are obligated to accept the NYC Medicare Advantage Plus Program payment. That includes all the hospitals in the NYC area, including those at Memorial Sloan-Kettering and The Hospital for Special Surgery (HSS), and almost all hospitals nationally and 99.5% of all doctors. The program is a national program so it covers retirees in any State in which they work or reside and when they travel.

This is a very misleading statement. Doctors who accept Medicare will provide service, but you may have to pay for the full cost of the service and then submit a claim to Emblem Health for reimbursement. I suspect that this will happen a lot. This is the big problem with MA plans along with the referral issue. This is why many reirees stay away from MA plans.

Currently most doctors do accept Medicare. They submit their charge to CSM for the 80% payment for the covered service and usually attempt to collect the finally 20% from Senior Care. Only then do they send a bill to the retiree for the remainder of the charge. Doctors are comfortable with reimbursements from CSM. They tend to be wary of payment from MA plans.

City Budget - Retiree Health Insurance

Over the last five years the City has budgeted the following amounts for retiree health benefits:

  • 2022 = $1.693B
  • 2021 = $0.268B (orig. $2.293B)
  • 2020 = $0.779B (orig. $2.500B)
  • 2019 = $2.230B
  • 2018 = $2.170B
It would be very informative to get the itemized details and supporting data for these numbers. That is real transparency.

The City OLR site has new FAQ sheet on its website.

This is another info link from a AFSCME local for a MA plan implemented in Illinois Illinois.

1 comment:

Distraught said...

The MlC minutes of 2/21 and the Chief Leader article of July 2021 both state that there are no copayments in the hew plan. This, along with so much else, is incorrect and misleading information
What kind of depraved society allows the former commissioner who negotiated these health cuts on the elderly and disabled to also negotiate a conflicts of interest waiver for himself to be compensated $500. an hour for returning to work at the same agency. Same city where the mayor allocates funding to pay gun toters $1000. a month not to shoot anyone.