Temporary Stay and the Case Against the Medicare Advantage Scam

On October 21, 2021 the retiree group in opposition to the Medicare Advantage scam was granted a temporary stay to the 10/31/21 opt-out deadline.

NYS Courts website – case index # = 158815/2021 Find the decision (login as a guest)

Please contribute

There are over 157,000 Medicare retiree that the City is trying to steal their Medicare rights and dump them into the inferior MAP plan.

Please go on the group's website and contribute just $25. The legal fight will be expensive. Expenses are already over $50,000 and it may take up to $250,000 to beat the City.

I'm afraid that if the City wins, retirees that have the finacial resources will be able to hold onto their Medicare coverage but retirees with limited funds will be pushed into the private plan.

Excerpt from Temporary Stay Decision

The petioners are the retirees and the respondents are the City and others.

FILED: NEW YORK COUNTY CLERK 10/21/2021 04:24 PM INDEX NO. 158815/2021 NYSCEF DOC. NO. 114 RECEIVED NYSCEF: 10/21/2021 158815/2021 Motion No. 001 002 003

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Motion Sequences 002

“A movant's burden of proof on a motion for a preliminary injunction is particularly high” Council of the City of NY v Giuliani, 248 AD2d 1, 4 [1st Dept 1998]. A party seeking a preliminary injunction must clearly demonstrate (1) the likelihood of ultimate success on the merits; (2) the prospect of irreparable injury if the injunction is not issued; and (3) a balance of the equities in the movant's favor. (Doe v Axelrod, 73 NY2d 748 [NY 1988]; Housing Works, Inc. v City of New York, 255 AD2d 209 [1st Dept 1998]).

As to likelihood of success on the merits, the Court feels that the method of implementation of this plan at present has been irrational, and thus arbitrary and capricious.

It is not in dispute that currently, in the midst of a pandemic, that has been hardest on the elderly and infirm, retirees have been given a deadline of October 31 to either do nothing in which case their health care plan will change, or to stay in their current plan in which they will likely have to pay what can only be described as a penalty. At the same time, there is little clarity as to which health care providers will be accepting this new Medicare Advantage Plan. It is simply irrational for retirees to have to make this decision as circumstances currently stand.

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Petitioners argue are that they will be irreparably harmed if forced to make a health care coverage decision by the October 31, 2021 deadline for the new Medicare Advantage Program which is due to begin January 1, 2022. As noted, it is undisputed that much of the program terms are still unsettled and unclear. At the oral argument held on October 20, 2021, the attorneys representing the respondents made clear that medical providers were still being contacted to see if they will agree to this plan. Moreover, it appears that a public hearing that was scheduled for October 28 has been cancelled. The respondents contend that fluidity of participation in the plan of healthcare providers is always subject to change but concedes that many other factors of the plan have not yet been determined. As noted above, once October 31 comes and goes, according to the way this plan is currently being implemented, there will be no turning back and the retirees will be bound by their decision. Any harm that they have suffered to have to decide without adequate information will be irreparable.

Petitioners argue, and the Court agrees that the balance of equities are in their favor. “The balancing of the equities requires the court to determine the relative prejudice to each party accruing from a grant or denial of the requested relief” (Barbes Rest. Inc. v ASRR Suzer 218, LLC, 140 AD3d 430, 432 [1st Dept 2016] internal citations omitted). Here it is clear that the potential for prejudice to the petitioners outweighs any prejudice to the respondents. No contract has been signed apparently between OLR and the respondents. This Court has upheld the process used to pick the Alliance, so the entire process will not need to begin anew.

In sum, while the Court has already determined that respondents’ ultimate determination of choosing a Medicare Advantage Plan provider was rational (Footnote 1) and does not intend to disturb that determination, the Court finds that the implementation of its program is irrational and if the

Footnote 1: See the Decision and Order of the related action, AETNA 158216/2021.

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petitioners and similarly situated individuals are required to opt-in or out of a medical program by the October 31, 2021 deadline there would certainly be irreparable harm.

Accordingly, it is hereby

ORDERED that the respondents are enjoined from enforcing the October 31, 2021 Opt-Out/ Opt-In date; and it is further

ORDERED that petitioners maintain the status-quo enrollment in until the respondents cure deficiencies with the implementation of the proposed new Medicare Advantage Plan, and it is further

ORDERED that such new plan be sent to this Court for this Court to review and determine whether such plan cures the defects as indicated above, and it if further

ORDERED that such plan be sent to the petitioner’s counsel seven days prior to such submission to the Court and petitioner may then provide any input regarding the proposed new plan to the Court.

The NYCERS Actuary and the Medicare Advantage Scam

Each year the NYCERS Actuary publishes a finacial report (2021) that anaylzes the City's future liabilities for other than pension benefits for city retirees. It's a pretty dry report but it is actually the most detailed description of retiree non-pension benefits, mostly health benefits and welfare fund payments. I have referred to this report in past Medicare Advantage scam postings but now I want to go into some of the details from the actuary's report. There is something about numbers that give you a different sense of the scam.

Now for the numbers for FY-2021:

• the number of city retirees = 243,978
• the amount the City put into the NYC Retiree Health Benefit Trust Fund = $3.200B
• the amount the City paid out for retiree health benefits = $2.784B
• the amount the City paid into the retirees welfare funds = $399.5M

The Monthly Health Insurance Costs

The Actuary states the following as the momthly imsurance premiums per retiree that the City pays to the insurance companies:

• HIP HMO
  • Non-Medicare Single - $776.01
  • Non-Medicar Family - $1,901.23
  • Medicare - $181.58
• GHI/EBCBS
  • Non-Medicare Single - $775.66
  • Non-Medicar Family - $2,035.61
  • Medicare - $194.14
• Other HMOs (without drug coverage)
  • Non-Medicare Single - $1,160.34
  • Non-Medicar Family - $2,701.42
  • Medicare Single - $291.83
  • Medicare Family - $576.92

Doing the arithmatic,
the annual cost for a GHI covered employee or pre-Medicare retirees's family health insurance is $24,427.32.
The annual cost of a GHI covered Medicare retiree is $2,329.68 plus $1,763.64 for the annual Medicare Part B premium refund.

Of cousre, the City is also targeting the Part B refund for elimination.

Distribution of Medicare retitrees over the city retirement systems.

This breakdown can be found on page 140 of the report. For some reason the Actuary uses a total population of 275,519 retirees when stating this breakdown. The key numbers are who's eleigible for Medicare with GHI and who is not. There are 157,381 Medicare eligible retirees with GHI coverage and 62,779 pre-Medicare retirees with GHI coverage.

The GHI pension fund breakown of the 157,381 is as follows

• NYCERS = 59,670
• TRS = 61,775
• BERS = 11,665
• Police = 15,507
• Fire = 7,339
• TIAA = 816
• LODW = 609

The HIP covered retirees breakdown is 22,404 for Medicare eligible and 9,169 for pre-Medicare. For some reason this group is not part of the Medicare Advantage scam. HIP is part of EmblemHealth as is GHI. I suspect there is undisclosed agreement covering HIP which the City/MLC does not want the public to know about. In fact, the retirees and also the workers have not seen a written and signed agreement between the City and the MLC. There is no list of which Locals have signed on to the Medicare Advantage scam. You can imagine a worker in his/her early 60's and looking at retirement and Medicare at age 65 becoming aware that his/her Local has just sold them out.

Pre-Medicare Retirees

None of the pre-Medicare retirees, which total 78,252, are being hit with Medicare Advantage scam as of now. They probably haven't even gotten notice of the scam yet. They won't get hit until they turn 65. Interesting figure: there are 31,527 police retirees in the pre-Medicare group.

The remaing 7,857 medicare eligible retirees, not in GHI or HIP, are in other health insurance plans. These retirees are being hammered the same way GHI covered retirees are.

There are also 12,155 retirees who have waived health insurance coverage.

Aetna and the City's Procurment Guidelines

One of the other plans is from Aetna and is a voluntary Medicare Advantage plan. Aetna has sued the City over improper procurment actions with respect to the award of the contract to EmblemHealth. The contract has yet to be registered with the Comptroller. In fact, it quite possible that the contract has not yet been signed or approved by Corp Counsel.

CMS Approval

It is safe to say that the new MAP plan has not yet gotten approval from CMS, the federal Medicare administrator. CMS will be the entitiy that will give money to EmblemHealth to run the MAP plan. I would love to see the application that EmblemHealth submits to CMS.

The Big Welfare Funds for Retirees

On pages 141 to 149 you can view a detailed list of all the RETIREE welfare funds, the number of retirees covered by the fund and the annual contribution to the fund by the City for each retiree. These figures do not reflect the contributions for current employees.

While these amounts add up to over $490M in FY-2022, the real money is paid for active employees at a total of almost $1.2B for FY-2022.

I'm only listing the larger funds here. The report has all the details.

• NYCERS
  • Managerial Employees - 8,451 - $1,940
  • Correction Captains ---1,901 - $1,590
  • Correction Officers -- 9,585 - $1,740
  • DC-37 ----------------- 37,391 - $1,940
  • Staff Analysts --------- 2,560 - $1,740
  • CWA -L#1180 ---------- 6,074 - $1,775
  • TRansit - PBA --------- 1,271 - $1,853
  • NYS Nurses Assoc. --- 4,294 - $1,740
  • Sanitation Officers -- 2,366 - $1,290
  • Teamsters L#237 ----- 7,276 - $1,085
  • Sanitation Workers -- 6,936 - $2,009
• TRS
  • UFT --------------------------------- 70,445 - $1,820
  • Supervisors and Administrators - 7,536 - $1,820
  • Professional Staff Congress ------ 2,081 - $1,965
• BERS
  • DC-37 - 12,991 - $1,940
• Police
  • DEA -------- 12,824 - $1,573
  • PBA -------- 23,329 - $1,853
  • LTBA -------- 4,014 - $1,665
  • Capt. End. - 1,436 - $1,665
  • SBS ---------- 7,949 - $1.740
• Fire
  • Firefighters - 10,488 - $1,820
  • Fire Officers - 4,819 - $1,695

Medicare.gov: Compare Original Medicare vs Medicare Advantage Scam

If you have been wondering if OLR has been correct in describing the new Medicare Advantage plan that they are forcing all retirees into, just check out the offical Medicare website with its helpful compare page.

On the this page you get to pick Original Medicare with or without Medigap insurance and/or Part D drug coverage versus Medicare Advantage. You then get a list of the main features of the two different plans.

When you pick Medicare Advantage chart you get all the same features as Original Medicare with Medigap insurance and Part D drug coverage except for one one big item. You will notice an interesting red X next to "Use of any doctor or hospital that takes Medicare, across the U.S.". This is the key problem problem for retirees especially those dispersed all over the country.

At the bottom of the page listing the features of either choices, you can click on a list of all the associated plans in your geographical area. The City MAP plan is not listed in Suffolk County, where I live.

The Budget and the Medicare Advantage Scam

The following are the amounts budgeted by the city for health insursance and welfare benefits in FY-2021 and FY-2022:

NYC Health Insurance and Welfare Fund Budget 2021-2022

Description	FY-2021	FY-2022	Inr/Dcr
Employee Health Insurance	$4.822B	$5.188B	$366.8M
Retiree Health Insuranve	$2.773B	$2.142B	($630.9M)
Employee Welfare Funds	$899.8M	$1,161.5M	$261.8M
Retiree Welfare Funds	$351.6M	$491.9M	$140.3M

It is clear from the chart above that via the Medicare Advantage scam the City was able to take $630M from the retirees health insurance benefits and increase payment to workers health insurance payments ($366M), and most importantly to funnel more into the union welfare funds, ($391M). The actual annual savings, however, is only $367M based of the fact that only 157,500 retirees are covered by GHI Senior Care, the target of the forced transfer.

UFT and DC-37 and the Welfare funds

As stated in the latest audit (October, 2020) from the Comptroller, the City gave over $368.0M to the UFT welfare fund and $288.1M to the DC-37 welfare fund in 2018. Click on the Comptroller's audit from the Comptroller. The total amount paid to all welfare funds for 2018 was $1.37B to 107 city unions of which over $113.5M was spent on administration.

The NYCERS Actuary's FY-2021 OPEB Report provides extensive information on non-pension benefits paid to retirees. In particular, see page 140.

Federal Subsidy for 2022

Note: As part of the ARP Act of 2021, the federal government gave the city $1.024B towards employees health insurance costs (ARP Act - 2021)

Retirees from the NYC Dept. of Ed and the Medicare Advantage Scam

All retirees from the NYC Department of Education or the old Board of Ed should be aware that there is a state law protecting their health insurance benefits. You can read a relevant court decision at Bryant.

With respect to Board of Ed retirees, the City's attempt to force all medicare eligible retirees into a Medicare Advantage (MAP) plan violates this law. Unfortunately, without court action the City will get away with it. There are current court actions against this conversion but I'm not sure that they address this state law.

The suing retirees are now aware of this restriction as is the City.

The law states without reservation that the City can't reduce your

1. health insurance benefits or
2. its associated contributions

unless it does the same to all active workers at the Department of Education. See Chapter 504 below.

This permanent requirement was enacted as part of the Tier 5 law passed in 2009. It was sponsored by the NYSUT association for the purpose of protecting their retirees from unilateral actions by school districts to cut their health benefits since the retirees did not have union representation. It was carefully constructed to include reductions both in benefits and the districts' contributions paying for the benefits.

This requirement clearly blocks the new MAP plan on both counts.

First, this is a reduction in benefits. The idea that the MAP plan is equal to or better than the current plan is disproved by the fact that retirees are not being given a free choice. In fact, reirees have had the option to enroll in Medicare Advantage (PPO) plan for many years and the numbers speak for themselves. TRS retirees eligible for Medicare have overwhelmingly chosen traditional Medicare with supplemental insureance:

• 61,775 retirees are covered by Medicare and GHI Senior Care
• 4,088 retirees are covered by Medicare Advantage - HIP HMO
• 1,488 retirees are covered by Medicare Advantage - Aetna PPO

I can not understand how UFT union leaders thought they could let the City cut the throats of their former members and eventually their current members.

In addition, most retirees who wind up in the MAP plan will have to buy their Part D drug coverage from the MAP vendor, Alliance/Emblemhealth.

Second, the City is clearly reducing its contributions to the retirees health insurance benefits. Except for a trivial first year monthly charge, the City is paying nothing for the MAP plan and it may actually be getting a kick back from Alliance/Emblemhealth. It is not even clear that the City has any standing in this contract because of possible lack of consideration from the City.

JUSTIFICATION

The following is the justification for the one year extension (Chapter 30) of this law in 2009. Chapter 504 made the protection permanent.

JUSTIFICATION: Health insurance coverage for school district retirees has been protected from unilateral reduction since 1994 under provisions of a law which is subject to annual renewal.

The law provides that school districts may reduce neither the level of health insurance coverage nor their contribution toward its cost for retirees, unless the reduction applies equally to active employees. This protects retirees by in effect making them part of the collective bargaining process.

The law does not, however, prevent school districts from taking cost-cutting measures, so long as these apply equally to active employees and retirees. There has been no evidence of harm befalling school districts over the past decade as the result of this requirement for fair treatment of their retirees.

It is clear what the policy is in New york State about treating retirees equally with active workers when it comes to health insurance coverage.

Chapter 504 of the Laws of 2009

Chapter 504 of the Laws of 2009 - Part B - Section 14

§ 14. Section 1 of chapter 729 of the laws of 1994 relating to affecting the health insurance benefits and contributions of retired employees of school districts and certain boards, as amended by chapter 30 of the laws of 2009, is amended to read as follows:

Section 1.

From on and after June 30, 1994 [until May 15, 2010,]
a school district, board of cooperative educational services, vocational education and extension board or
a school district as enumerated in section 1 of chapter 566 of the laws of 1967, as amended,

shall be prohibited from diminishing the health insurance benefits provided to retirees and their dependents or
the contributions such board or district makes for such health insurance coverage
below the level of such benefits or
contributions made on behalf of such retirees and their dependents
by such district or board

unless a corresponding diminution of benefits or contributions is effected from the present level during this period by such district or board from the corresponding group of active employees for such retirees.