City Medicare Privatization Sparks Retiree Pushback

Roman Broszkowski May 28, 2021

City retirees and their allies gathered Monday near City Hall Park to protest the proposed privatization of their Medicare plans. 

The event, attended by around 70 retired teachers, union members, political candidates, and supporters, represented the most recent volley in an ongoing conflict over the city’s Medicare responsibilities. Yet instead of pitting city leadership against union heads, the two groups find themselves in agreement and trying to head off rebellion from rank-and-file unionists. 

Retired city workers rallied outside City Hall Monday. Photo: Roman Broszkowski.

RetireeAdvocate/UFT —  the advocacy caucus within the United Federation of Teachers that organized the noon-time press conference — has mobilized to prevent the union-backed Medicare transition.  More than 14,000 people have signed on to a petition demanding a moratorium on the transition — which is currently in its final stages. 

The privatization scheme originated in 2018 negotiations between the Metro Labor Council and city officials to find roughly $600 million in budget savings and would see 250,000 retirees and their dependents move from Medicare to a private company-managed Medicare Advantage plan.

For retirees, the main concerns are cost and availability of care. In a statement released Monday, RA/UFT elaborated on their opposition to the plan.

“Private insurers incur much higher administrative costs than government-administered Medicare. They make a profit by charging high administrative fees, paying doctors less, and limiting services to their subscribers. Retirees are concerned that the proposed new plan will limit their choice of doctors, eliminate certain hospitals and networks from their coverage umbrella, require burdensome referrals and pre-approvals for medical procedures and increase out-of-pocket costs for services and prescription drugs.”

Medicare Advantage offers lower premiums in return for more threadbare coverage.

And while proponents of Medicare Advantage point out that the plan tends to have much lower monthly premiums, opponents say that such an agreement is only beneficial for those without severe or chronic conditions since Advantage plans seek to generate profits by disincentivizing — or in some cases denying — expensive care. 

Dr. Alec Pruchnicki, a geriatrician who works with Medicare recipients in assisted living facilities in NYC, explained the situation to the assembled crowd.

 “HMOs like Medicare Advantage plans might seem good if you’re perfectly healthy and like the gym membership, taxi service, and other crumbs they give you,” he said. “But when you get really sick, you realize that you’ve given them the power to determine which doctors you see, how much rehabilitation you get after a major illness, or even which hospitals you can go to. But by then, it’s too late, and they have control over many of your medical decisions. Don’t get seduced by the minor benefits, when they can later lead to major problems.”

Some estimates have said that while such a plan may save millions for the city budget, costs may arise for individual retirees by almost $6,000 annually. If these figures hold, transitioning from Medicare to Medicare Advantage would shift the burden to individuals to the tune of $1.5 billion annually — almost three times the amount the city would save.

Medicare Advantage works fine for people in good health but restricts the care they receive when they fall in poor health. Photo: Roman Broszkowski.

RetireeAdvocate/UFT members have said they remain unclear why the savings must come at their expense rather than new real estate or taxes on the finance industry. 

“There were seven, eight options to save money, and they decided to focus on the retirees as the way to save money,” Norm Scott —  a retired NYC elementary teacher — said. “[Why don’t they] hit the real estate industry with a 1 percent tax or a stock transfer tax? There are other ways to raise money.”

While union leaders appear to be moving ahead with the Medicare Advantage transition, opposition to the move seems to be growing outside of just retiree activist groups. On Monday, Lindsey Boylan, a candidate this year for Manhattan borough president, attended to show her support for the retirees.

“One of the single biggest indicators of poverty in this borough is just being a senior on a fixed income,” Boylan said. ” Right here, you have a group of people who’ve worked their whole lives for the benefit of others, in many cases as teachers and the like, and they’re just saying we deserve something that isn’t going to make it impossible to see a doctor … I wouldn’t be anywhere else, I think it’s so important.”

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