New York City 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 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 expand 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.
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.
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.
Brooklyn Councilwoman Shahana Hanif, a progressive Democrat, said that’s not good enough.
“This is shameful,” Hanif wrote on Twitter of Adams’ announcement. “Forcing this change on our city’s retirees will lead to worsening health outcomes at a time when they need high-quality care.”
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.