A Better Way for Retiree Health Care
For more than half a century, New York City has kept a covenant with its workers: your wages will be modest — lower than those of your counterparts in the suburbs or the private sector — but as a full-time employee you will be entitled to health care coverage without paying premiums. If you retire with enough years of service, you will be guaranteed Medicare coverage, with the city picking up the 20% Medicare does not pay.
Through the years, the city has added copays and deductibles, whittling away the value of the coverage. But the basic agreement has lasted through major recessions and the city’s catastrophic budget losses after 9/11. Until now.
Today,[Jan. 9] the City Council will hold a hearing on a proposal that would break the compact. The proposal to amend the city’s administrative code would legalize degradation of retiree health benefits and permit negotiations about active employee benefits that may diminish coverage.
Councilmembers who support the amendment may believe they have no choice. If they refuse to amend the law, the argument goes, city retirees will be pushed off Medicare into a private Medicare Advantage plan. Traditional Medicare and the current supplemental plan will no longer be available, even for those willing to pay.
That argument is full of holes. Without changing the law, the city could simply add a private Medicare Advantage plan and continue to offer the existing Medicare and supplemental coverage — premium-free. But the Adams administration has made “health savings” a requirement for wage bargaining and appears committed to charging premiums for coverage that has historically been free.
Most city retirees cannot afford the so-called “choice” to pay for a supplemental plan. The average pension from the largest city retirement system is $26,596. Buying out of the new Medicare Advantage plan will cost $2,400 a year, $4,800 for a couple.
As a result, retirees from higher-paid city jobs will have access to a Medicare supplemental plan that enables them to get all the medical care they need, while the majority of city retirees — many of whom are women and people of color — will be left with a for-profit Medicare Advantage plan that saves the city money by controlling access to care. Generations of workers and their unions have fought for the principle that all city workers, regardless of race, gender, income, or job title, should have access to the same health coverage. If the Council votes to change the law, that principle is betrayed.
The fallacy of the proposal before the Council is that it risks the health of thousands of older New Yorkers and erodes a bedrock right to health care — yet still fails to grapple with the real sources of spiraling costs. Even if the Medicare Advantage plan were implemented today, New York would find itself right back in the same health care crisis in a few years. The fundamental problem is that this country lacks universal health care, but even within the current system, NYC is paying too much. The city has not effectively used the leverage of the 1.25 million people whose health care it covers to achieve fair hospital and drug pricing.
A better solution is within reach. Our union, the Professional Staff Congress/CUNY, has proposed an approach that both addresses the need for immediate relief and creates a framework for solving the underlying problem. The PSC proposes Council action that would:
Keep premium-free Senior Care in place along with traditional Medicare while buying time to develop a sustainable solution. The city can address the immediate crisis while maintaining benefits over three years by redirecting funding to current benefits instead of continuing to build reserves in the Retiree Health Benefits Trust.
Create a stakeholders’ commission charged with finding a path, before the temporary funding is depleted, to reducing hospital prices The Council should appoint a commission of elected officials, leaders and members of the Municipal Labor Committee (MLC), representatives of hospitals and hospital workers, health providers, insurance companies, and elected retiree representatives.
End the city’s reliance on unstable and outdated funding mechanisms and rethink how the city pays for health insurance.
Affirm the right of the MLC to bargain about health insurance.
As a health policy professor and a former union president, we are not naïve about what it will take either to design or to implement a new health care structure. But New York City can do better than sacrificing the most vulnerable while leaving the fundamental problem unsolved.
[Barbara Bowen, PSC president from 2000 to 2021, is professor of English at Queens College and the CUNY Graduate Center. Barbara Caress, a PSC member, is a health care consultant who teaches health policy at Baruch College.]