New York’s highest court has rejected a legal challenge by retired city workers seeking to block a plan to move them from traditional Medicare – with city-funded supplemental coverage – to private Medicare Advantage plans.
Newsweek has contacted the New York City Law Department for comment via email.
Why It Matters
New York City is required by law to provide health insurance coverage for retirees formerly employed by the city. The roots of the policy go back to 2021, when city officials and leaders of major public employee unions agreed to cut $600 million annually from the city’s healthcare spending.
The agreed-upon solution was to shift roughly 250,000 retirees and their dependents to a Medicare Advantage plan – an alternative to traditional Medicare that typically offers lower premiums.
At the time, City Hall, then under the helm of former New York Mayor Bill De Blasio, argued in favour of the change because of the annual savings it would generate. The current Mayor Eric Adams has since embraced the idea.
But critics have said the plan would mean more out-of-pocket costs for former New York government employees.
What To Know
In a unanimous decision issued Wednesday, June 18, Judge Shirley Troutman of the State of New York Court of Appeals said the retirees failed to provide adequate evidence that the shift would reduce their health benefits. The court also found no legally binding agreement ensuring the city would maintain their existing coverage.
“If forced into a Medicare Advantage plan, retirees will lose access to many of the doctors they depend on for life-saving treatment and will routinely be denied coverage for medical care. That is because, unlike traditional Medicare (a publicly run program), private Medicare Advantage plans limit access to medical providers and medical care in order to maximize profits,” the Organization of Public Service Retirees said in a statement following the decision.
Medicare Advantage plans are private insurance options approved by Medicare. They replace traditional Medicare Parts A and B, covering hospital and outpatient care — except hospice. Most also include prescription drug coverage (Part D).
Insurance companies offering these plans get a set payment from Medicare for each person enrolled. They also charge patients out-of-pocket costs and often require them to use doctors in their network or get referrals to see specialists.
What People Are Saying
The Council of the City of New York Common Sense Council said in a statement: “While we are extremely disappointed with the Court of Appeals decision today, it only strengthens our resolve to fight for our municipal retirees and ensure they are provided the supplemental Medicare insurance they were promised. We encourage our colleagues to join us in supporting Intro 1096, which would prevent this administration and any future administration from taking away this fundamental right and forcing retirees into a lesser health insurance plan.”
Marianne Pizzitola, president of the NYC Organization of Public Service
Retirees, said in a press release: “On behalf of 250,000 retirees, we call on the City Council and the next mayor to prevent us from being forced into a privatized Medicare Advantage plan and to let us continue receiving the health insurance we were promised and desperately need: traditional Medicare plus a supplemental plan.”
Justin Brannan, New York City Council Finance Committee Chair and Democratic candidate for city comptroller, said on X: “The City of New York should never, ever be screwing over retirees – and neither should the courts. Nobody will ever want to work for New York City again. Zero trust. Medicare Advantage is a bait and switch scam & betrayal. Enough! City Hall clearly doesn’t care about retirees.”
What Happens Next
While the Court of Appeals dismissed the retirees’ primary claims, it sent the case back to a lower court to resolve remaining legal issues.
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