New York City Retirees Fight Their Own Unions to Stop Catastrophic Health Care Cuts / by Jenny Brown

_{^{Union retirees protested the mayor’s and the the Municipal Labor Committee’s effort to change a city law protecting their health care benefits in January. The law is unchanged but on Thursday the MLC voted to shunt up to 250,000 city retirees into a for-profit Medicare Advantage plan anyway. Photo: CROC.}}

_{Originally published in Labor Notes, on March 10, 2023}

Defying two years of protests and lawsuits by union retirees, New York City’s Municipal Labor Committee voted March 9 to scrap some of the best retiree health care coverage in the country. The change would put 250,000 city retirees into a for-profit Medicare Advantage plan run by Aetna.

Twenty-six unions in the MLC voted no, while others abstained. But their votes were swamped by the votes of the largest unions on the committee, AFSCME District Council 37 and the New York United Federation of Teachers.

Retirees and active members protested during the MLC vote and marched to City Hall. They are asking the city council to strengthen the law protecting retiree health care. The NYC Organization of Public Service Retirees promises to sue.

The New York City fight has wider implications as for-profit Medicare Advantage insurance companies come under fire for second-guessing doctors, blocking patient care, and ripping off the public while they reel in record profits.

What is Medicare Advantage?

In traditional Medicare, available when you turn 65, you present your card, get care, and the government pays for it.

With Medicare Advantage, a for-profit insurance company gets money from the government to cover you. But they get to take a fat cut—Medicare Advantage is now the most lucrative sector of an already-lucrative health insurance industry. And they get to say what care you can get.

Medicare Advantage plans negotiated by employers and unions do provide worse coverage than traditional Medicare. But they are generally better than the individual Medicare Advantage plans that seniors may sign up for themselves and which are advertised on late-night TV.

INDIVIDUAL VS. NEGOTIATED

Medicare Advantage plans that individuals buy on the private insurance market may work out to have cheaper premiums than traditional Medicare because they wrap in a drug benefit and may cap out-of-pocket expenses. But they are notorious for denying expensive care, imposing narrow networks of doctors and hospitals, and ripping off the government.

On the other hand, union-negotiated Medicare Advantage plans are the result of insurance companies having to negotiate with unions and employers to sign up large groups of retirees, and that may restrain the most egregious abuses. Still, some retirees in negotiated plans report that they were denied care at the most difficult time in their lives.

In both cases, the for-profit insurance companies that run the plans have a strong incentive to deny care. Every dollar they don’t pay for your care is a dollar earned by shareholders and CEOs, who often take most of their compensation in stock. Stock prices are based on how little care the company can pay for.

MEDIGAP VS. MEDICARE ADVANTAGE

Traditional Medicare (part A & B) costs $164.90 a month, and covers hospital costs and 80 percent of non-hospital costs. But medical costs are such that the 20 percent gap in coverage can quickly become ruinous. So the government set up a regulated market of Medigap supplements. Retirees can pay additional premiums to private insurance companies to cover the final 20 percent, and cap out-of-pocket costs.

Medigap plans can cost as little as $75 a month, but can cost hundreds more, depending on the plan, your age, gender, and whether you smoke. Unlike Medicare Advantage, however, these Medigap plans are heavily regulated.

It is this gap for which New York City union retirees over age 65 are covered by the city’s Senior Care plan. The city also pays the monthly premiums for traditional Medicare, so retirees get premium-free coverage.

NUMBERS DON’T ADD UP

States and municipalities have increasingly tried to put retirees into Medicare Advantage plans once they reach age 65. Where unions have fought the change, as in Washington state and Vermont, they have been able to prevent the switch. But in New York City, retirees have been fighting not just the city but also their own unions to keep from being shunted into a for-profit plan.

Public employees in New York City have given up a lot over the years to keep their ironclad retiree health care coverage, and it paid off until now. Along with paying traditional Medicare premiums, the city pays for a wrap-around supplement called Senior Care that picks up nearly all costs not covered by Medicare, along with drug benefits.

Leaders of District Council 37 and the UFT claim the Medicare Advantage plan will save money and provide the same coverage. But the numbers don’t add up, said Len Rodberg, a retired City University of New York health policy expert who will be affected by the change. “Medicare Advantage starts out 20 percent below what Medicare does, in terms of actual money available to spend on health care,” Rodberg said.

Traditional Medicare pays 3 percent overhead. By contrast, Medicare Advantage plans have to make a profit for shareholders, and they also pay huge executive salaries and maintain enormous staffs to protect their profit margins by delaying and denying care. In these for-profit plans, Rodberg said, “basically anything that costs money would need pre-approval.”

MLC leaders said their consultants told them the difference would be picked up by the federal government, Rodberg said. But while the federal government used to subsidize for-profit Medicare Advantage plans 20 percent over what they paid out for traditional Medicare patients, that subsidy is now down to 2 percent.

Medicare Advantage plans also cut costs by contracting with certain providers. This means the insurance company will only pay for care provided by certain doctors or hospitals. For retirees who move to states with spotty coverage, Rodberg said, “suddenly their Medicare card won’t work, cause they’re in Medicare Advantage, not Medicare.”

QUICK REACTION

Retired teacher Gloria Brandman heard about the change in 2021 from friends in PSC-CUNY, the union of faculty and staff at the City University of New York. She and other teacher retirees swung into action, holding a webinar that drew 400 people. The recording of the webinar circulated widely, leading to a whirlwind of protest which forced UFT’s president, Michael Mulgrew, to hold a town hall where he tried to sell the change.

Retirees from the teachers, AFSCME, and several uniformed service unions formed a Cross-Union Retirees Organizing Committee to fight. Brandman and other CROC activists hounded newly elected Mayor Eric Adams at every opportunity.

They rallied when the MLC met: “We marched on the hottest day of the year,” Brandman recalled. They held a Valentine’s Day “Don’t Break Our Hearts, Mayor Adams” event.

In October they held a “Halloween Horror” press conference, saying “Mayor Adams, You’re Scaring Us to Death.” (“Death masks optional,” said the invitation flier).

NO MAGIC SAVINGS

A city law requires that all the health care options the city provides be premium-free. That law turned out to be an important backstop, and the NYC Organization of Public Service Retirees sued to get it enforced. A judge agreed that it was against the law for the city to charge seniors an extra $191 per month to stay in original Medicare.

So Adams and the MLC leadership asked the City Council to change the law. They walked into a buzz saw. After vigorous protests and reams of testimony from retirees and active union members objecting to the change—which could have undermined active members’ health care as well—the City Council declined to alter the law.

In her testimony before the council, Jen Gaboury, PSC chapter chair at Hunter College said, “We know these ‘savings’ don’t come from some brand of private business magic. If you get this money, you’ll be denying care and/or delaying treatment to your own people, older city workers.”

CONTRACTS HELD HOSTAGE

Part of the problem is that the unions created a $600 million hole in the last round of contracts and they’re trying to plug it now. They negotiated to use a health care stabilization fund, designed to equalize costs between health plans for active members, to bolster wage increases. Now the fund is broke and that threatens to raise health care costs for active members.

At the City Council hearings, PSC-CUNY proposed a way out of this mess. Retired professor James Perlstein described it in his testimony: “(a) Redirect funds the City holds in reserve to bridge the Municipal Labor Committee Stabilization Fund for three years, (b) Create a stakeholders commission charged with finding a path to control health care spending, with hospital pricing as a priority, and (c) Develop a sustainable mechanism for funding City health insurance.” PSC also suggested that New York City’s very profitable non-profit hospitals contribute, since they don’t pay taxes.

None of these steps have been taken, so far. Instead, city administrators continue to push Medicare Advantage. “The city’s taken a hardball position that it won’t negotiate new contracts until the unions save them $600 million by moving forward with Medicare Advantage plan,” said Rodberg in February. The city promises to replenish the stabilization fund with the estimated $600 million it will save from the switch.

AFSCME DC 37 members have been working for 18 months without a contract. Recently the city and the union inked a tentative agreement with raises that don’t even keep up with inflation. Other city unions object that this low bar will harm their negotiations, since the city expects the first agreement settled by a major city union to set a pattern which the other municipal unions will largely follow.

And while members will get to vote on the agreement, they won’t be able to vote on the retiree health care concession their union agreed to behind closed doors. It seems that as a condition for settling, the dominant MLC unions agreed to impose what the retirees call “the nuclear option,” deliberately misreading the city law they tried to change, and making Medicare Advantage the only option for retirees.

Any retiree who wants to stay in traditional Medicare would have to pay for all of their coverage, as if they had no union at all.

_{Jenny Brown is an assistant editor at Labor Notes.}

Bills to help struggling state retirees gain bipartisan support / by Evan Popp

_{^{The Maine State House in Augusta. | Beacon}}

_{Originally published in the Maine Beacon on March 21, 2023}

Retired public employees who have been trying to survive on insufficient pension payments may soon see relief after members of Maine’s Labor and Housing committee earlier this month issued a unanimous report recommending an increase to the cost-of-living adjustment. Inflation coupled with drastic cuts made a decade ago to state worker and teacher pensions are pushing more retirees closer to poverty.

As Beacon previously reported, former Gov. Paul LePage and the Republican majority in 2011 significantly slashed public employee pensions to pay for income tax breaks mostly benefiting the wealthy and corporations.

That plan froze cost-of-living (COLA) adjustments on pensions for three years and reduced the maximum COLA from 4% to 3%. Additionally, that 3% COLA boost was limited to only the first $20,000 of benefits the retirees receive. (The cap has since been adjusted to about $24,000).

The cuts have made state employees incredibly disadvantaged in retirement. Those who received pensions don’t pay into Social Security, meaning they are entirely dependent on their pensions when they retire. COLA is currently 8.7% for Social Security benefits, compared to 3% for Maine’s public employees.

In a unanimous report to the legislature’s budget-writing committee, Democrats and Republicans on the Labor and Housing Committee recommended action to address that issue. The committee put forward two possible policy prescriptions that could help lower retirees’ expenses.

LD 112, sponsored by Rep. Jan Dodge (D-Belfast), a retired music teacher, would require the state to pay 60% of former teachers’ health premiums. LD 111, put forward by Rep. Dan Shagoury (D-Hallowell), would similarly require the state to cover the cost of Medicare Part B for former teachers and public employees.

Those bills are considered narrower fixes to the problem, with the committee acknowledging in its report that the measures are not “all-inclusive solutions” but will “help alleviate the pain that retirees have been feeling” since the changes made by LePage in 2011.

A more expansive bill, LD 70, sponsored by Dodge, would eliminate the $24,000 cap on the portion of benefit subject to COLA to instead cover the entire benefit received. However, the Labor and Housing Committee said the bill would cost nearly $1.2 billion and noted that the Maine Constitution does not allow for the creation of new benefits unless they’re immediately and fully funded.

Still, given the state’s projected revenue surpluses of $282.8 million for fiscal year 2023 and $488.6 million for 2024 and 2025, retired public workers and their advocates say lawmakers need to do what they can this budget cycle to help fill the hole dug by LePage and Republicans a decade ago.

The Labor and Housing Committee agreed that action to address the issue is needed, and lawmakers on the panel expressed “frustration and disappointment that the proposed [Mills administration] budget does not address retiree pension cost-of-living adjustments.”

Labor advocates reacted positively to the committee’s recommendation, with the AFL-CIO praising Democrats and Republicans on the committee for “coming to a bipartisan agreement to support public employees.”

Members of the committee were also excited by the unanimous report.

“Grateful to my colleagues in the Labor and Housing Committee for coming together on this issue,” Rep. Amy Roeder (D-Bangor), the House chair of the committee, said. “While our committee members may not always see eye to eye on policy, we are committed to thoughtful, respectful dialogue around policy. Love that this was a point of agreement.”

_{Evan Popp studied journalism at Ithaca College and interned at the Progressive magazine, ThinkProgress and the Reporters Committee for Freedom of the Press. He then worked for the Santa Fe New Mexican newspaper before joining Beacon. Evan can be reached at evan@mainebeacon.com.}

Workers condemn King’s proposal to raise the Social Security retirement age / by Dan Neumann

_{^{Sen. Angus King in the U.S. Capitol in 2021. | Anna Moneymaker, Getty}}

_{Originally published in the Maine Beacon on March 2, 2023}

One of the state’s biggest unions said its members are deeply concerned about a proposal floated by independent Sen. Angus King and a group of Senate Republicans to slash Social Security benefits by raising the retirement age to 70.

“Social Security is a critical lifeline for working-class people and we strongly condemn any action to cut it, including raising the retirement age,” said Andy O’Brien, communications director for the Maine AFL-CIO, which represents more than 40,000 workers and retirees across the state. “While the rich in this country are living longer than ever, the disparity in life expectancy between the haves and have nots is getting worse. These proposals would significantly harm working class, low-income, Black and Indigenous people, who on average have much lower life expectancy rates than wealthy Americans.”

O’Brien added, “The labor movement is closely watching this debate in Congress and we will vigorously defend our retirement security against any attacks.”

Semafor reported on Tuesday that King is in talks with a group of Republican senators led by Louisiana Sen. Bill Cassidy to formulate a bill that could include raising the Social Security retirement age from 67 to 70.

Other policy considerations reportedly being discussed include tweaking a benefits formula to take into account the amount of years a person has worked, and expanding the program’s ability to invest in private stocks, rather than the current trust fund model.

Spokespersons for King and Cassidy said the focus of the negotiations is to keep the Social Security trust fund from going insolvent in nine years. The looming insolvency is spurred by a combination of Social Security payroll taxes dropping during the pandemic and retiring Baby Boomers expanding the number of beneficiaries.

But Republicans’ sincerity about fixing the solvency issues is in dispute.

The timing of the talks between King and Republicans is prompted by the need for Congress to strike a deal on raising the debt ceiling, which Republicans have previously threatened to take hostage to force cuts to Social Security.

For example, Republican Sen. Ron Johnson of Wisconsin has proposed waiving Social Security payroll taxes altogether as a way to keep people in the labor force longer and combat a tight labor market.

“The lawmakers claim that they’re looking at benefit cuts and reforms due to concern over the solvency of Social Security — though Republicans have been clear that their intentions are to slash benefits and force people to depend on work to survive for even longer into old age,” Truthout reported.

The reporting on the talks between King and Senate Republicans did not include any proposals to solve the solvency issue by increasing the amount of money going into the trust fund.

On the progressive wing of the Senate, Vermont Sen. Bernie Sanders, an independent, and Massachusetts Sen. Elizabeth Warren, a Democrat, have introduced a bill to increase retirement benefits by scrapping the income cap on the Social Security payroll tax. Currently, income over about $160,000 a year isn’t subject to the payroll tax. About 20% of current and future covered workers have earnings above the taxable maximum, according to the Social Security Administration.

Maine Rep. Chellie Pingree, a Democrat, has co-sponsored multiple bills to lift the income cap, including Connecticut Rep. John Larson’s proposal to subject those who earn more than $400,000 per year to payroll taxes and Illinois Rep. Jan Schakowsky’s bill to raise the income cap to $250,000.

“Congress must scrap the income cap allowing millionaires and billionaires to pay a Social Security tax on only $160,200 of their income,” Pingree said in a statement.

She noted that with the cap in place, people making $1 million a year stop paying into the program by the end of February, adding: “Today, Feb. 28, actually marks the day when the wealthiest Americans stop paying into Social Security for the entire year — pretty crazy when you consider that most Mainers will be paying in until Dec. 31. As Republicans plan to cut, privatize, and even end Social Security, our best option is to sunset the cap and protect the hard-earned benefits of older Mainers.”

Spokespersons for King and Cassidy did not say whether lifting the income cap is currently a part of their talks.

“The Social Security trust fund is going insolvent in nine years. Senators Cassidy and King have been working on a legislative solution — which has been reported in the past. The plan is not finalized,” the senators’ offices said in a joint statement.

“This is an example of two leaders trying to find a solution to a clear and foreseeable danger across party lines,” the statement continued. “Although the final framework is still taking shape, there are no cuts for Americans currently receiving Social Security benefits in our plan. Indeed, many will receive additional benefits.”

The consequences of raising the retirement age would mean deep cuts for people who claim early. Social Security allows a person to retire as early as age 62, although by taking a significant reduction in their benefits. That reduction goes up as the full retirement age is raised. The Center on Budget and Policy Priorities found that raising the retirement age to 70 would mean a retiree at age 62 would receive only 57% of their full monthly benefit.

“Most people claim early, which means they could receive as little as half their full benefit,” CBPP reported in 2016. “Nearly half of retirement beneficiaries claim benefits at age 62. Some of these beneficiaries — especially those with lower earnings — are in poor health but don’t meet the stringent criteria for disability benefits.”

CBPP also found that raising the retirement age hits low-income workers, disproportionately people of color, the hardest.

“Though raising the retirement age cuts everyone’s benefits roughly equally, it affects incomes unequally,” CBPP reported. “That’s because Social Security benefits make up a greater share of income for low- to middle-income retirees, as well as for minorities.”

Kelly Hayes, a contributing writer at Truthout, also noted that cuts are being proposed as American life expectancy has fallen.

“Life expectancies are dropping and they want to raise the retirement age,” Hayes tweeted on Tuesday. “They want you to work until you’re dead, but at a certain point, no one is going to hire you. What are people without money supposed to do in this country? Die or be caged. This is an age of social disposal.”

_{Dan Neumann studied journalism at Colorado State University before beginning his career as a community newspaper reporter in Denver. He reported on the Global North’s interventions in Africa, including documentaries on climate change, international asylum policy and U.S. militarization on the continent before returning to his home state of Illinois to teach community journalism on Chicago’s West Side. He now lives in Portland. Dan can be reached at dan(at)mainebeacon.com.}

Maine News: Group homes say they’re being shorted by state in effort to raise care worker wages / by Dan Neumann

_{^{Care worker Phoebe Shields with South Portland resident Ruth. | Beacon}}

Touted as one of the top achievements in a $1.2 billion supplemental budget passed last month, state lawmakers say they are countering Maine’s severe shortage of trained direct care workers to care for seniors and people with disabilities by finally funding a long-sought wage increase.

But some directors of state-subsidized congregate living facilities say the state’s plan to raise wages to $15.94 an hour, or 125% of the state’s minimum wage, is essentially robbing Peter to pay Paul, as the wage boost will come at the expense of their other program costs.

“We see all the rhetoric out there around how they have finally and ultimately fulfilled this 125%-of-minimum-wage initiative. It’s not true,” said Todd Goodwin, CEO of the John F. Murphy homes, which runs 37 group homes in the Lewiston-Auburn area. The agency is the largest group living provider in Maine.

Direct care professionals, many of whom are women and people of color, care for seniors and people with disabilities in their homes or group settings and are some of the lowest paid employees in the state. Low reimbursement rates from MaineCare, the state’s Medicaid program, often leave agencies without enough funds to adequately pay their employees. That low pay, combined with often having to work far more than 40 hours a week to cover staffing shortages, has led to an extremely high turnover rate among care workers and uneven services for those in need.

A multi-year legislative campaign to address the high turnover gained steam in January 2020 when the Commission to Study Long-Term Care Workforce Issues issued its report recommending that direct care workers be paid at least 125% of the minimum wage. In 2021, a bill introduced by Rep. Jessica Fay (D-Raymond) to adopt the recommendations put forth by the commission, including a pay raise, was supported by group home agencies and their workers and passed the legislature.

The bill wasn’t funded until this year, however, when it was included in the bipartisan supplemental budget signed by Gov. Janet Mills on April 20. Lawmakers said agencies will receive back pay retroactive through January 2022 when Fay’s law went into effect.

‘Bait and switch’

But group home managers who Beacon spoke with say the wage hike is partially being funded by shifting money from their operations budgets. They explained that it is because the state switched to a new funding model late last year without notifying them.

From 2007 until Fall 2021, group home agencies were funded through MaineCare based on what is known in the industry as the Deshaies funding model. Under the model, a per hour reimbursement fee is paid out in a lump sum to each agency, 40% of which must be allocated for staff wages, 18% for payroll taxes and benefits, 25% for program costs and 11% for administration costs, along with a 6% provider tax.

Under the old model, agencies received a total reimbursement rate of $29.28 per service hour, 40% of which allowed only for a $11.71-an-hour wage for direct care workers. This left agencies with $17.57 per hour for all other program costs.

But under the new model adopted by the state last year, the allocation for other program costs has shrunk. The total per hour reimbursement rate was raised to $32.13, but subtracting the higher wage of $15.94 an hour from that rate leaves the agencies with $16.19 per hour for program costs.

That seemingly small difference between the remaining $17.57 per hour under the old model and the $16.19 per hour left under the new model will yield significant impacts on an agency’s annual budget, explained Ray Nagel, the executive director of the Independence Association, a community in Brunswick for people with intellectual disabilities.

“That is a lot of money,” he said. “In one year alone, just for my agency, that’s a difference of about $360,000.”

Goodwin echoed Nagel, saying that in order for the state to fully fund the pay raise and not cut into their other programing funds, the total per hour reimbursement rate for agencies would need to be raised to $39.85, not the $32.13 currently set by the state.

Goodwin maintains that the state did not inform group home agencies that they were no longer using the Deshaies funding model. He said he and other providers have made records requests under the Maine Freedom of Access Act to find out more about the state’s new funding model.

“Absent a published methodology upon which to check claims, there is nothing about this that doesn’t stink,” he said.

Rep. Michele Meyer (D-Eliot), who serves as the House chair of the legislature’s Health and Human Services Committee, gave this response when Beacon asked her about the agencies’ concerns over cutting operation costs as a result of the state’s new funding model.

“There are many providers in Maine and we were glad to hear from them during the public hearing process for the supplemental budget,” she said in a statement. “The HHS Committee prioritized their needs and asked the Appropriations Committee to fund them. The law we passed requires that impacted rates include a minimum of 125% of minimum wage for the labor component of the rates. Please note, providers must choose to pass that on to their staff.”

Nagel agreed that there has been a lack of transparency from lawmakers about the new funding model. “They’re just trying to baffle people by saying, ‘We put millions of dollars here, we put in this and this and that,’” he said. “But when you look at the details, that’s 100% wrong.”

He continued, “They essentially reallocated the rate so that now our agencies are paying for the labor portion at the expense of the programming. We’re extremely upset. We think it’s a bait and switch.”

Wages need to continue to rise, advocates say

Alan Cobo-Lewis, a professor at the University of Maine who serves as head of the school’s Center for Community Inclusion and Disability Studies, said raising direct care worker wages is critical to eliminating large waitlists for various home or community-based care services. Several thousand Mainers in need of care are currently on such lists.

But Cobo-Lewis, whose son has a disability and relies on daily-living support services, said the controversy about how the state has funded the wage boost is ultimately beside the point, as even the long-sought raise to $15.94 an hour can’t compete in today’s labor market against less demanding jobs.

“125% of minimum wage was a pre-pandemic recommendation,” he said. “I think that the state needs to invest in getting direct care worker wages up to around $20 an hour. Anything less devalues direct care workers and the people with disabilities who they support.”

He added that other state initiatives to recruit new direct care workers are likely to be unsuccessful unless workers are provided a living wage. “All the money being spent on one-time incentives, career lattices, websites to promote direct care worker jobs, etc., isn’t going to address the crisis unless hourly wages also go up,” he said.

_{Maine Beacon, May 20, 2022, https://mainebeacon.com/}