NYC mayor signs contract that eliminates traditional Medicare for retired city employees

Retired public safety workers and teachers plan to sue again, citing the Medicare Advantage Plan's pre-authorization requirements

By Chris SommerfeldtNew York Daily News

NEW YORK — Mayor Eric Adams signed off on a contract Thursday that will eliminate traditional Medicare coverage for retired city government workers and shift them into a privatized version of the program instead — a highly controversial move that immediately drew a lawsuit threat from a grassroots retiree group.

The contract with private health insurance giant Aetna is the culmination of a years-long effort by the city to enroll its roughly 250,000 municipal retirees in a Medicare Advantage Plan.

Under the deal inked by Adams, the city's retirees — most of whom are on a traditional Medicare benefits structure that includes a Senior Care supplement — will lose their current coverage and be automatically enrolled in an Advantage plan administered by Aetna, effective Sept. 1.

The Advantage setup will save the city some $600 million annually thanks to increased federal subsidies, an allocation Adams described as critical at a time that the municipal government is staring down a $10 billion budget deficit by 2026. In a statement, Adams also argued the Advantage plan will improve health care coverage for city retirees.

"This plan 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," said the mayor. "This Medicare Advantage plan is in the best interests of both our city's retirees and its taxpayers."

Tens of thousands of retired teachers, cops, firefighters and other city workers say Adams is wrong.

Citing federal studies that show Advantage plans can deny beneficiaries "medically necessary" care, retirees have called on Adams since he took office to let them stay on traditional Medicare, contending that the switch would put them at risk of losing access to certain doctors, medical procedures and drugs.

A group called the NYC Organization of Public Service Retirees successfully convinced courts last year to block the first iteration of the Adams administration's Advantage plan — and Jake Gardener, a lawyer for the group, told the Daily News on Thursday that they will file another lawsuit in hopes of derailing the new plan as well.

"We will be challenging this violation of the retirees’ health care rights in court," Gardener said. "This is just the latest example of the city trying to save money on the backs of retired and disabled city workers. What this would do is to jeopardize the health of a quarter million elderly and disabled city workers."

Retirees are resisting the Advantage switch, in part, because Aetna will require pre-authorizations for some forms of care, a protocol that does not exist under traditional Medicare. They fear this will result in diluted coverage, and have depicted it as a life and death issue.

"Retired firefighters, police, EMT workers and teachers will be forced into a privatized, managed care plan that has strict in-network, pre-authorization and referral requirements that will cause potentially life-threatening delays and denials of care," said Marianne Pizzitola, a retired FDNY EMT who leads the NYC Organization of Public Service Retirees.

"Many of the quarter-million respected public servants, and all the current NYC public employees, will be harmed by this damaging decision by Mayor Adams."

In his statement, Adams said he sympathizes with the angry retirees.

"We also heard the concerns of retirees and worked to significantly limit the number of procedures subject to prior authorization under this plan," he said.

The reason courts blocked Adams’ first plan was because it would’ve levied a $191 monthly premium on retirees who wanted to opt out of Advantage and stay on traditional Medicare. The courts found that penalty violated a local law requiring the city to provide its retirees with premium-free coverage for life.

Adams’ administration, with support from the city's Municipal Labor Committee, says the new plan structure complies with the court rulings because there will no longer be a $191 penalty on the table as the premium-free Advantage coverage is the only insurance option available to retirees.

Gardener disagreed and claimed the new plan is also illegal.

"Forcing them into Medicare Advantage by not even giving them the option of keeping their existing health insurance is far more damning and just as illegal," he said.

Gardener declined to say exactly on what grounds his group will challenge the new plan, but added: "We have a number of grounds that we will be relying on to ensure that the savings the city is looking to achieve is not obtained solely on the backs of retirees."

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