New York’s Medicare Advantage health plan is a betrayal

The lure of free money leads people to do short-sighted and even illegal things. It’s happening right now, as New York City again seeks to force 250,000 municipal retirees off traditional Medicare and into an inferior insurance plan, Medicare Advantage. The city’s incentive is easy to understand: money. Moving people moves $500 million a year from the city budget to the federals.

But Medicare Advantage is not traditional Medicare. It is flawed and run by companies that put profits before patients. Many doctors do not participate in Advantage plans because insurance companies require doctors to obtain prior authorization to perform necessary procedures and tests. Insurers determine what is medically necessary and come between a doctor and his patient.

Retirees protesting the Medicare Advantage situation regarding Law 12-126 outside City Hall, Manhattan, New York on Wednesday, October 12, 2022.

Here’s a cruel example: Kathleen Valentini, a former teacher and wife of an NYPD detective, was denied an MRI due to pain in her leg. Her doctor appealed and it took the insurer five weeks to reverse her decision. Meanwhile, an aggressive cancer has grown in her hip. When the doctors at Memorial Sloan Kettering saw her, they said if she showed up just a month before her, they could only treat her with chemotherapy. Now, they had to amputate her leg, hip and pelvis first.

Alas, Kathleen’s story is not an outlier. The American Medical Association surveys doctors about prior authorization and 90% said PsA caused delays in treatment; one-third reported that PA delays resulted in a serious adverse event for a patient; 24% reported that PA delays resulted in hospitalization of patients; 18% said PA led to a life-threatening event; and 10% reported that prior authorization reviews resulted in permanent physical harm, disability, or patient death.

Yet City Hall is determined to lock 250,000 retired seniors and disabled first responders into a single Medicare Advantage plan. Not only is such a move most likely illegal, but it is wise and very foolish. Last year, when the city first tried it, the retirees challenged the move in court and won. During the appellate court argument, Judge Sallie Manzanet-Daniels said, “One size doesn’t fit all.”

You are right. The city’s presumption that the health care needs of 250,000 people living in thousands of communities could be met by a single health insurance plan is folly. Yet the lure of that free federal money blinds otherwise intelligent, civic-minded people to do foolish things. This is the most generous explanation for why City Hall is now telling retirees, “If you don’t accept this Advantage Plan, you must waive your eligibility for the City’s Retiree Health Care Program altogether and we will no longer reimburse you for premiums.” Medicare Part B or [Income-Related Monthly Adjustment Amount].

For more than 50 years, the city has offered retirees a choice of health insurance plans. It also reimbursed its city retirees for Medicare Part B and IRMAA premiums. It is enshrined in the same Administrative Code Act, Section 12-126, which provides health care for current employees, retirees, and their dependents. When City Hall tried to dissect that statute this year, the City Council had the good sense to push back on the attempt. The law does something else: It promises retirees a choice of health plans, including traditional Medicare. It is clearly written in the legislative history of laws.

That promise has been repeated year after year by recruiters to potential new hires; by city HR people; in each brochure summarizing the program distributed annually to workers and retirees; and union representatives who provide guidance to people about to retire. There was never any ambiguity: in retirement you would have a choice of city-paid insurance plans to meet your particular needs. People relied on that promise to choose their doctors, their hospitals, and where they wanted to retire. Now, the city is trying to break that promise.

The city can still draw federal money and it can do it fairly. Medicare has a $10 billion fund to support innovation. It requires a sponsor (the city) to work with an insurance company to design a Medicare Advantage plan that meets everyone’s needs. Such a plan could eliminate prior authorizations and reimburse doctors and hospitals equally. And it would be voluntary. And if the plan is better than traditional Medicare, people will vote for it with their feet. But the city needs to recognize two things: one size doesn’t fit all; choice is essential. And a promise made should be a promise kept.

Barrios-Paoli served as commissioner and deputy mayor under four union administrations; he was executive director of Lincoln Hospital in the South Bronx; and served as chairman of the board of NYC Health + Hospitals, the largest municipal health system in the country.

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