If you want to see why we are in a fix on healthcare, you have to very closely read the 2019-2021 and recurring thereafter Municipal Labor Committee (umbrella group of city unions) Agreement with the City on healthcare.
The City and MLC met their targets on savings from this Agreement for the 2019-2021 fiscal years from the last round of collective bargaining. A big part of that was forcing new employees onto HIP HMO for their first year on the job even though this is a huge violation of the UFT Contract that guarantees UFT members a choice of premium-free plans.
The City and MLC were not content to stop there but further agreed to additional healthcare savings (givebacks). Now, we are told we have to replenish the Health Stabilization Fund, a fund started back in 1983 that the City draws from. The City is always going to demand further givebacks on healthcare. Does anyone think it will stop at the Stabilization Fund? The 2018 agreement sets up a Tripartite Committee to recommend more healthcare savings (givebacks). This Tripartite Committee consists of representatives from the City, the MLC, and oh no, Arbitrator Martin Scheinman.
Yes, that Martin Scheinman. The one who lengthened our 2009-2018 contract to pay for lump sum payments for 2014 retirees because so many people retired rather than wait until 2020 to get the money that was owed to them from work they did from 2009-2011. The same Martin Sheinman who helped the UFT and City broker a deal where they extended the time the City could pay UFTers back for that aforementioned interest-free loan we made to the City for 2009-2011 retro money that we ended up not being paid back in full until the summer of 2021. The same Martin Scheinman who decided UFTers weren't owed money immediately for working through the spring break in 2020 and instead gave vacation days. The same Martin Scheinman who decided to only provide narrow exemptions from the COVID vaccine mandate in 2021. This man is not our friend by a longshot and the City is happy to use him as they almost always get most of what they want from Scheinman.
Where are we exactly right now with the Tripartite Committee?
Here is part of what City Labor Commissioner Renee Campion and her Deputy Claire Levitt said in a letter to then-Mayor Bill de Blasio last December. First, they boast that they got all of the givebacks from the MLC on healthcare from the 2017-2021 round of collective bargaining (2019-2022 for UFTers). Then, Campion and Levitt move on for more givebacks to replenish the Healthcare Stabilization Fund:
Most recently, the Tripartite Committee was tasked with looking at the status of the Stabilization Fund. An Agreement to set up this Fund was executed in 1983 to help the City and the MLC equalize the costs of the premium-free CBP-PPO (GHI) and HIP HMO plans offered to active employees and pre-Medicare retirees. Under the equalization formula, when the HIP rate exceeds that of the CBP, the Stabilization Fund receives a contribution from the City, and when the CBP is higher, the Stabilization Fund has to cover the increased CBP cost over that of HIP. Over the years, by agreement between the City and the MLC, excess money in the Fund has also been used to cover many of the escalating costs of health care, including the City's PICA program (which covers injectable and chemotherapy drugs), additional contributions to union welfare funds, and the costs of preventive care mandated by the Affordable Care Act. In FY 21 and FY 22, the CBP rate was higher than that of the HIP rate so the Fund will have to cover increased costs, accelerating the decline of the Stabilization Fund which we had anticipated would occur in the next few years. This could affect the City's ability to recover recurring savings from the CBP plan in the future, as they are derived from offsets to the Stabilization Fund assets. For this reason, the FY 21 withdrawal from the Fund, and therefore the savings, were limited to $600 million so that any further CBP-derived savings will remain in the Fund.
To address the Stabilization Fund, the City and the MLC agreed to implement a new retiree Medicare Advantage program which is expected to save about $600 million a year due to Federal subsidization of Medicare Advantage programs. The Medicare Advantage program will provide NYC retirees with a continuation of premium free coverage while providing important enhancements including free telehealth visits, transportation benefits to and from doctor appointments, fitness benefits, meal delivery after a hospitalization, wellness rewards, and coverage while traveling. The City and the MLC agreed to use the savings from that program to help support the Stabilization Fund.
These are savings (givebacks) on top of the $600 million in savings we already gave back to the City in the 2018 Contract. Campion and Levitt don't mention the problems with privatized Medicare Advantage programs. EdNotes covered these issues as did the NY Times recently.
For the city's Medicare disadvantage (Mulgrewcare), there would be pre-approvals needed for procedures that are not required in traditional public Medicare and of course the limited choice of doctors who won't want to accept the new Medicare Advantage. Campion and Levitt also don't say that Medicare-eligible couples would have to pay close to $400 a month to keep their current Medicare-Senior Care plan because charging healthcare premiums unless it is above the cost the city pays for the HIP-HMO plan goes against Administrative Code 12-126. A judge ruled it was illegal to charge anything in premiums unless it is greater than the rate the city pays for HIP-HMO which is currently over $900 a month.
MLC Chair Harry Nespoli says there is no plan B so the MLC and the City are now going to the City Council to attempt to change the Administrative Code which would impact both retirees and active members as the choice of premium free healthcare plans would be basically gone. At that point, who knows how low the city will go in pegging a new benchmark rate for premium-free healthcare if the HIP-HMO rate is no longer used as the rate the city will pay up to for premium-free healthcare?
What are our choices?
Professional Staff Congress President James Davis laid out three of them at the MLC meeting that was leaked. Davis speaks around the 40-minute mark.
1-Keep the status quo and do not agree to any changes to the administrative code.
2-Give the city the change in Administrative Code 12-126 that it wants and risk much poorer health coverage for city workers.
3-Find cost savings in another way.
Let's now break down all three options.
1-If we take option one and just say no to any change in the Administrative Code, we risk ending up before Martin Scheinman again who will almost certainly side with the City and make drastic cuts to our healthcare.
However, we don't have to go to Scheinman and we can use the Triborough Amendment of the Taylor Law which keeps the status quo in place in any expired agreement until there is a new agreement. On healthcare, this is reinforced by a 1992 agreement signed by the MLC and City which calls for negotiations and agreement before anything on healthcare can be changed. I believe we could wait it out if we choose to do so.
In addition, UFT retirees are protected by a state law that says retiree health benefits cannot be reduced by school districts unless a similar reduction is made for active employees. If we agree that Medicare Advantage is the only premium-free healthcare option for retirees, then it follows that the same limitation would have to come for active employees. That would obliterate Article 3G1 of the UFT Contract that guarantees UFT members a choice of premium-free healthcare plans.
2-If we give the City the change to Administrative Code 12-126 it is looking for, we run the risk of having a very inferior benchmark premium-free healthcare plan created by the City and MLC which will most probably be a managed care HMO for active people and there will be a privatized Medicare Advantage plan for retirees. It would be administered by Aetna (Aetna finished second last time when a judge blocked the Alliance of Blue Cross and GHI; the Allliance dropped out recently). Aetna's Medicare Advantage plans do not exactly have a spotless record.
The way Administrative Code 12-126 is written currently, the city pays up to the cost of HIP-HMO for all medical plans it offers which right now is over $900 a month. If the code is changed, we have no idea how low the benchmark will go but in all fairness, I believe the MLC would have to agree to it. Do you have any faith that Mulgrew and company will agree to a benchmark that won't limit care and eliminate premium-free options? Anything over whatever benchmark figure they agree to will be paid by employees and retirees.
3- If we go for the third option President Davis talked about, we have to look for other healthcare savings. Here are some of the alternative savings the City and MLC agreed to pursue. Notice Medicare Advantage (b) is only one of the choices for savings. Look at the entire list:
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According to MLC Chair Nespoli, Medicare Advantage is the only option. According to the 2018 Agreement between the MLC and the City, this is not true. There are audits and other ways to achieve savings.
I am personally intrigued by choice c. I have always wondered why there are something like 100 welfare funds for 100 different municipal unions. Why do PSC retirees have the same prescription drug benefits as active PSC members but UFTers do not? If there was one giant city worker welfare fund, wouldn't its buying power be much greater because of the enormous pool of all of the city workers and retirees as opposed to a bunch of separate welfare funds? It is my understanding that this solution was never even looked into. Remember, Nespoli said there is no plan B.
4-Mobilize and fight like real unions with over 100 MLC unions engaging in real actions for healthcare gains and not choosing which healthcare givebacks are the least damaging. The MLC should draw a line in the sand and say, "No more healthcare givebacks!" We would then use all of our collective power to say we demand better healthcare, not cut rate healthcare. (Ok, I'm dreaming again)
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