Attack on the NYC City Council and the Health Benefits of NYC Workers and Retirees

The battle over health insurance for NYC Medicare eligible retirees is being fought over 126.b.(1) of the NYC Admin Code as well as workers’ contractual rights. This fight, however, effects all NYC retirees and workers.

The key part of Section 12-126 that is in dispute is:

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. …

The City Council’s Legislative Authority

The City Council is the legislative body for the NYC government.

On June 28, 2001, the NYC City Council unanimously overrode the mayor’s veto and passed Local Law 39 of 2001.This law modified Section 12-126.b.(1) of the Admin Code of the city of New York. Specifically, it made permanent the full refund of Part B premiums to eligible NYC retirees who were paying those premiums to the federal government as part of their Medicare benefits. This vote makes it clear that the City Council has authority over this part of Section 12-126 even in the face of mayoral opposition. As an insight to this law, remember who the mayor was in 2001.

The Proposed MAP Contract

As part of the Medical Advantage Plus (MAP) contract that the City wants to sign with Alliance, there is the following clause (Addendum A, Quoted Stipulations, page 4 ):

“Retirees who opt out of the NYC Medicare Advantage Plus Plan must pay the premium difference between the NYC Medicare Advantage Plus Plan and their selected retiree Medicare health plan, if applicable.”

In its raw form, this an agreement between two parties to damage a third party. The City and Alliance drafted this provision to put in place a mandatory penalty for retirees who choose to leave the MAP plan. The driving force behind Alliance’s profit margin is the number of retirees in the MAP plan. The more retirees that opt out, the less money that comes in from CMS ,the federal Medicare administrator, and the higher the risk of claim losses becomes.

Attack on the City Council

In addition to this attack on retirees, the clause is a secretive attempt to subvert the legislative authority of the City Council. It is my opinion that this clause violates the City Charter. The clause clearly attempts to block the City Council’s legislative authority over Section 12-126 and destroy the purpose of this 54-year-old statute.

At the November 10th City Council contract hearing, the OLR Commissioner made no mention of this penalty clause in the contact. She was there to sell the benefits of the MAP plan and not clearly state the problems with the MAP plan. Specifically, there was no mention of the fact that this would be an almost $4B annual contract. That is the amount that CMS will pay Alliance each year to cover the retirees’ health benefits. According to the stipulations in the contract, the City will only pay a trivial $14M in the first year of this five-year contract ($7.50 per month per retiree). This a dump and run scam if I ever saw one.

What would happen if the City Council chose to begin action to modify Section 12-126.b.(1) explicitly requiring the City to pay for the Senior Care premiums for eligible NYC retirees, like the action it took with Local Law 39/2001?

Would the Law Department argue that the mayor’s contract prevents the Council from passing such a law? I am beginning to think that this contract is illegal as it is currently drafted.

Stupidity and the Medicare Advantage Scam

I am assuming that all NYC retirees and workers know that the City is trying to screw with retirees Medicare benefits. Enough with abuse of power and illegal actions, let's look at the City's stupidity.

Cross Over Retirees

Consider a current 66 year old male NYC retiree with traditional Medicare and GHI Senior Care coverage. He has a 62 year old wife. With respect to Part D coverage at age 65, he continued his family drug coverage with GHI which he started when he retired at age 62. He pays the the family GHI-CBCBS drug premium ($149.96), not the Senior Care family drug premium ($300.60).

In FY-2021 the City paid $2,023.61 per month to GHI for CBP/EBCBS family health insurance. This was for workers and retirees with non-Medicare eligible dependents. This means that the City is paying GHI $2,023.61 for this retiree's family health insurance even though he is Medicare eligible. I am almost dead sure that the City is not paying GHI the $194.14 per month individual Senior Care premium for this retiree, since it is already forking over the $2,023 each month.

Now consider that in 2021 this retiree and his wife adopted two newly born children. The retiree now has three dependents on his health insurance coverage and the City now has a 25 year liability for family GHI CBP/EBCBS health insurance costs. As I stated above the monthly cost for the GHI family coverage is $2,023.61. That is $24,283 per year. Even when the retiree's wife turns 65, the City will still have to pay the $2,023 per month

The New MAP Plan for January 1, 2022 - With a Court Stay in Place

On January 1, 2022 the City wants to jam this retiree, along with all other Medicare eligible retirees (not HIP-HMO), into a Medicare Advantage plan with the express purpose of avoiding paying the Senior Care $194.14 per month premium. Of course, the City is not actually paying for this retiree. The City then wants to give the "savings" to the union welfare funds (the MLC).

In fact the City will probably never save any money on this retiree.

Political Blowback

Since the City can not escape paying the $2,023.61 per month for this retiree, would it not be more politically advantageous to leave this retiree in his current "Senior Care". You know this family is going to be radically motivated to rip the heart out of the scum that are screwing up their health insurance. Of course all effected retirees are going to want to get revenge but the City is not even getting any "savings" in this case.

I created this exaggerated case to highlight the complications of the Medicare Advantage scam. There about 158,000 Medicare eligible city retirees covered by Senior Care. I guarantee you that 25% of those retirees fall into this cross over scenario to some extent. Just think of a 66 year old retiree marrying a 55 year old. Happens all the time. All of a sudden the cost goes from zero to $24,283 per year.

Catch-22

The City has created a Catch-22 for the Medicare eligible retirees. The City will not be saving anything on these cross over retirees and yet the City is punishing them by reducing their benefits.

The retirees are either forced into the new inferior "free MAP" plan or pay the Senior Care $191 a month premium each for themselves and everyone of their Medicare eligible dependents plus $125 month each, for Part D coverage, for themselves and everyone of their Medicare eligible dependents.

Of course the new free MAP plan is not totally free since the drug coverage will cost $125 per month each for the retiree and any of his/her Medicare eligible dependents. In addition, the retiree can not choose to buy the Part D drug coverage on the open market since CMS gives Medicare Advantage plans a monopoly on Part D coverage. Interestingly, the retiree in Senior Care plan can shop for a better Part D drug plan.

How About a Little Intelligence

The City has pressure on it health insurance costs. Instead of picking on a party that the City thinks it can walk over, how about bringing all parties together. That means the insurance companies, the workers, and the retirees. Get the insurance companies to offer better coverage at lower cost and require all the workers and the retirees to make a monthly payment. That would also mean that the City would have to be totally transparent. That is a big problem. Don't feel sorry for the City. The federal government gave the City $1.02B in FY-2022 to pay for workers health insurance.

FY-2021 Was a Very Good Year for the City Pension Funds -- $57.5B Increase

Short and sweet, read pages numbered 218 and 219 from the NYC FY-2021 CAFR.

Pages 136 to 144 are interesting reading about the cost of non-pension benefits to retirees.

A Simple Look at the Pro's and Con's of Medigap Insurance and Medicare Advantage Insurance From the Wall Street Journal

I have previously written about the City's Medicare Advantage scam. That is the one where the City saves money by taking away traditional Medicare/Medigap insurance from retirees over age 65 and dumping them into a Medicare Advantage plan. The City then gives the money saved to City unions for their patronage welfare funds.

It is really difficult sorting through the pros and cons of the Medicare/Medigap versus the Medicare Advantage plans. This is especially hard since the insurance companies, who run the Medicare Advantage plans, spend huge amounts of money promoting their extremely profitable businesses.

I recently, however, came across a very simple straight forward explanation in the Wall Street Journal, of all places. Please read the article.

The basic conclusion is that if you can afford it, the Medicare/Medigap program is the better choice, since soon or later we all have signification health issues. For decades the City, by statute, has been paying for the Medigap insurance for its retirees. Now it wants retirees to pay for the insurance and give the savings to the union welfare funds.

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.