NYC retiree health care plan has former city workers fearing they’ll go broke
Susan and William Shenton. (Obtained by Daily News)
Mayor de Blasio is betting that a massive shift in the way New York City provides health care coverage to retired municipal workers could save it up to $600 million a year — but many of those very same workers fear the new plan could bankrupt them in their golden years.
Under the city’s policy, about 250,000 retired city workers are faced with two basic options: enroll by default in the city’s newly offered and federally backed coverage, known as the Medicare Advantage Plus plan, or opt out of that plan to maintain their already existing health care, which will cost them $191 a month in out-of-pocket expenses.
Retirees say neither of those are good options, but that it’s difficult to determine which is worse because information provided by the city’s Office of Labor Relations is contradictory, or, in some cases, flat-out wrong.
They also contend the shift is unjust on principle — that they were promised a certain set of benefits upon retirement and that the city and the Municipal Labor Committee, an umbrella group for unions that handles retirement benefits, reneged on that promise.
“I feel betrayed by the city and the unions — especially the unions,” said William Shenton, who is 79 and worked for the New York City Housing Authority for 30 years before retiring in December 2000. “At this point in our lives, we’re just not able to cope with this.”
When Shenton retired, he included his wife Susan, 75, on his health care coverage, which is a combination of Medicare and the GHI-Empire Senior Care Plan. Nearly 20 years later, she was diagnosed with a rare lung disease, which requires medicine that costs nearly $130,000 a year — an expense covered in large part under her current insurance and a supplemental plan for medication.
As Shenton understands it, the city’s new plan wouldn’t cover nearly the same amount of those costs, and as a result would bankrupt them. So after weeks of researching the new plan, they decided to stay with what they have.
But that will require a bit of work — and more money — on their end. Instead of asking retirees to opt into the new plan, as of Oct. 31 it will become their default coverage unless they opt out, putting the onus on them to maintain the status quo.
“I’m opting out,” Shenton said. “If we don’t, we’re going to go broke.”
Maintaining their current coverage won’t come without an additional cost. As part of the city’s shift, retirees who choose to maintain status quo health coverage will be required to pay $191 a month. For Shenton plus his wife, that adds up to nearly $4,800 a year. Include the $640 a month Susan already pays out-of-pocket for her medication, and the couple is facing at least $12,480 a year for care not covered by insurance.
The Shentons are keeping their old coverage because, based on information William says he gleaned from the city’s helpline, it’s unclear whether he needed to do so in order to maintain his wife’s medication benefits.
“It’s not fair,” he said.
Many of the city’s most powerful unions are telling members the plan will actually amount to an upgrade. In a recent message to retirees, Henry Garrido, the head of DC 37, wrote retirees would be able to keep their current doctors under the plan and would be able to access “a concierge service” if difficulties arise.
“District Council 37 was deeply involved in constructing this plan and we are positive it meets the unique needs of our retirees,” Garrido wrote. “In fact, with the NYC Medicare Advantage Plus Plan, retirees will be able to go to any doctor or hospital that accepts Medicare.”
President of Local 831 Harry Nespoli. (Christie Farriella for New York Daily News)
Henry Garrido, executive director of DC37, in a 2015 photo. (Andrew Schwartz/For New York Daily News)
Harry Nespoli, the Municipal Labor Committee’s head, blamed “false rumors” on the resistance coming from retirees.
“All the unions — they voted for it,” he said.
That is not entirely true, though.
While many unions support the plan, not all are on board. Police Benevolent Association President Pat Lynch wrote in an Aug. 2 email to retirees that his union didn’t consent to the plan and objects “to any retired members being placed into a Medicare Advantage plan unless or until an agreement to do so is reached through collective bargaining.”
Some retirees have also requested a Manhattan Supreme Court judge force the city to, at the very least, slow down the process. Their lawyer, Steve Cohen, said the city’s plan is deeply flawed.
“The big idea is to shift people to the Medicare Advantage plan because the federal government pays for it. They want to get this off the city budget,” he said. “But not all doctors take Medicare Advantage. It’s disastrous for people out of state, and it’s disastrous for people here too.”
Retired NYPD officer Alan Odze. (Provided by Alan Odze)
Former NYPD Officer Alan Odze said that while a city helpline operator told him the new plan would cover the doctor treating a melanoma in his eye, his doctor said it wouldn’t.
“It really is outrageous” he said. “The city is not telling these people the truth — all the retirees. The new plan, the Advantage plan, all doctors are not taking it.”
Odze said he needs to stay with his oncologist because the doctor is one of two on the East Coast who specializes in his medical condition.
The promise that Advantage Plus will allow retirees to keep their doctors is also coming from the United Federation of Teachers. In a message to retired teachers, UFT President Michael Mulgrew said the “plan will allow retirees and their eligible dependents to keep their current doctors and hospitals.”
Odze begged to differ and estimates that if he were to take that plan, he’d have to pay $42,000 a year out-of-pocket in additional to health care costs. His police pension, he said, amounts to $29,000 a year.
“I don’t have that kind of money,” he said.
So Odze is planning to do what Shenton and others will do if the policy is not struck down in court — he’ll pay the additional $190 a month, even though he believes that’s not what he was promised when he retired.
“We had a benefit that was afforded to us, and now they’re changing it,” he said. “They’re changing to a plan that’s not going to be readily available to everybody.”
The foundation for the policy was laid by de Blasio and labor leaders in the early months of his first term. In May 2014, de Blasio rolled out a deal with the UFT that gave teachers 18% raises over nine years, with more than $1.3 billion of the money coming from the city’s Health Stabilization Fund. That fund is used and was intended for supplementing the health benefits city retirees receive.
The deal also required unions to hit targets on health care savings every year.
“The notion here is that nothing is imposed, everything is cooperative, but we have to get to that dollar figure,” the mayor said at the time.
Mayor de Blasio (Mark Lennihan/AP)
De Blasio spokeswoman Laura Feyer said the approximately $600 million in savings that will be realized by using the Advantage Plus plan will help replenish the Stabilization Fund and will ultimately support health benefits programs paid out by it.
Nick Paolucci, a spokesman for the city’s Law Department, said the lawsuit filed by retirees against the city is “under review.”
But the legal action brought by the retirees isn’t the only one against the city regarding its new policy.
Further complicating matters is the fact that, while Advantage Plus will be paid for by the feds, it will be administered through a private insurance provider selected by the city. That provider is Alliance, a joint venture between the insurers EmblemHealth and Empire Blue Cross Blue Shield. But the contract for the work is now being challenged in court by two other insurance providers: United Healthcare and Aetna.
Those cases are both underway in Manhattan Supreme Court. Paolucci said the city’s handling of the contract award was “proper.”
“Alliance met all of the requirements and the city stands by its contract award,” he said.