The City’s Failed Attempt to Steal from its Retirees and the Medicare Advantage Scam

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.

In 2021, the City introduced a new Medicare Advantage plan, the MAP plan, 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.

On September 29, 2021, the retirees sued the City.

As of March 3, 2022, a state judge ordered the City to not charge the retirees the $191.57 monthly premium.

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.

In its 3/21/2022 appeal papers the City claims that Emblemhealth did this “to retain market competitiveness”.

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.

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.

Needles to say the City is trying to expedite its appeal to overturn the judge’s order and circumvent Section 12-126.