The lawsuits — googled for clarity

The first meeting of the UFT’s newly constituted Retired Teachers Chapter took place this past week — the rundown of which you will not find on its website, but happily and colorfully described on Arthur’s Union Matters and Norm’s EdNotes. 

A key feature of that meeting had to be the update Marianne Pizzitola gave us on the healthcare battle that her retiree group has been waging on our behalf in the courts since 2021.  

When she turned the mic over to one of the lawyers (Jake Gardener) to give us the rundown, I was all set to take some serious notes. That didn’t get very far. 

Too much has happened in the past few years to be condensed into a 15-minute briefing, and much of what I came out with looked like “We won in the trial courts and at the appellate” and “It’s still in litigation.” Oh, and there might be a fourth lawsuit. So, I spent the whole of yesterday and today fleshing out the darn thing for myself and anyone else who cares.

What follows is not complete, as there were motion, hearings and thousands of paper submissions in between the delivered opinions. I’m leaving out the super-technical points of law, which you can follow yourself at the links.  But most of the “wins” were solid, we still have Senior Care at no premium cost. The $15 copays, though, will bite us in 2025.  

In each case below, I start with my notes from the meeting and follow up with what I found online.  Fingers crossed I got these right. 

#1.  “Campion.”   Something to the affect that in 2021 the City said it wouldn’t fund any plans except the new PPO. Marianne/her NYC Retirees challenged that, won at trial court, won at appellate [Supreme]. Next month he’ll be arguing the case in Albany at the highest level [Court of Appeals].

Google results 

The City announced it was changing retiree health insurance in July 2021, saying it wouldn’t fund any plans except the new PPO and that retirees would have to pay $192/month if they wanted to keep the Senior Care plan they were on come Jan 2022. Marianne’s group challenged that decree on Sept 26, 2021 with an Art. 78 Petition against the City. They claimed they couldn’t be forced into an Advantage for three reasons: the City’s Admin Code §12-126 requires the City to pay for any plan up to the HIP HMO statutory cap (at the time $859/month) and the projected cost of Senior Care was far below that ($191/month); their existing health insurance benefits were protected, and the new plan violated the NYS Moratorium Act (see the Nov 29, 2022 complaint below in #3, and a user-friendly explanation here on the Pollack Cohen website). 

The Supreme Court issued a temporary injunction on Oct 21, 2021, saying that the MLC could not intervene in this case (since former unions could not represent retirees), that an Advantage plan might be “rational” but its implementation was “irrational, and thus arbitrary and capricious” and would cause irreparable harm if retirees were made to opt in or out of it by Oct 31. Everything had to stay the same until it could rule on underlying arguments.  

More hearings and document submissions followed. The Court’s March 3, 2022 decision vacated that Oct 2021 ruling. It determined among other things that because the City had addressed some of the implementation issues of the new plan, it was no longer irrational. Some of the legal arguments made by the retirees were “unavailing,” amendments could be made to health insurance during collective bargaining, and that the NYS Constitution does not guarantee specific health insurance for retirees. But the $191/month fee to remain in Senior Care was prohibited, as it would run afoul of Admin Code §12-126. In other words, if given the option of Senior Care, retirees could not be charged “any costs” for it except for the part that rises above the HIP amount. Additionally, the deductible would only apply to 2022. The new Advantage plan couldn’t start until April 2022 and retirees could opt out of it if they wanted to. 

Apparently, within days of that March decision, the City withdrew the Alliance plan. But the copays remained.

[I’m not sure whether the City appealed AGAIN or whether what follows is further clarification by the Supreme Court of that March 3, 2022 decision.] The Court ruled on Nov 22, 2022 that the issue raised on this appeal by the City regarding the $192/month premium “is one of pure statutory interpretation,” that there were factual issues in the Code surrounding the phrase “on a category basis” that couldn’t be determined at this time.  In short, the Court affirmed the earlier decision in favor of the retirees, that no costs of Sr Care could be passed onto the Sr Care enrollees at this time.

#2.  “Bentkowski.”  Won at trial and at the appellate, and that the City made a motion at the highest court to appeal, but he doesn’t know yet...

Google results:      

As explained in the class action lawsuit filed by the lawyers for Bentkowski et al. on May 31, 2023 (complaint and brief), the City told Medicare-eligible retirees in March 2023 they could no longer get Senior Care and would be automatically enrolled in a new Aetna PPO come Sept 1. The retirees objected to the fact that should they opt out of the new plan, not only would they be required to pay their own Part B premiums and supplemental costs, but the City would be “unjustly enriching” itself.

The plaintiffs claimed they’d be harmed in various ways, including that not all providers would accept the proposed PPO, prior authorizations could be denied, continuity of care would become problematical in the switch, delayed or no payment of claims would mostly likely occur, non-Medicare retirees would be discriminated against, no full and accurate description of the new plan had been provided, and moving out of state might mean difficulty in finding a replacement Medigap. (A very nice list of negatives indeed!!)  In fact, as they say on p. 77 of the complaint, there’d be a whole set of “new healthcare ‘rules’” for retirees had not been adopted in compliance with CAPA (the NYC Admin Procedure Act), and worse still: the City “conspired with Aetna to unlawfully restrain competition” in the health insurance market.

BTW ... there’s a really good description of Medicare, Advantage plans, and supplements on pp. 23–31  (though I disagree with a bit of wording in §129). 

On Aug 11, 2023 the Supreme Court ruled that the City could not remove retirees from their current plans, require them to enroll in the proposed PPO, or seek their own coverage. 

On Sept 19, 2023, the Court vacated motion sequence 001 in that Aug 11 decision, reverting to the July 6, 2023, opinion. Referring to motion sequence 002, a preliminary injunction that had been issued on June 5, 2023 was now “ripe for a final determination.” Accepting the reasons put forth in the July 6 opinion, it ordered that the City would be permanently enjoined from removing retirees from their current plan, requiring them to enroll in the Aetna PPO, or making them seek their own coverage.

On May 21, 2024, the Supreme Court upheld those Sept. 19th rulings, giving a whole lot of explanation and background. It said that the City had disputed the retirees’ claims, but had not presented “any evidence controverting them” — in fact, it had submitted only “minimal evidence” and relied heavily on Summary Program Descriptions. The record was clear, the Court said, that for 50 years, the City had promised that it would cover as a secondary payer any benefits that Medicare didn’t cover as primary. It also said that the record shows that retirees had relied detrimentally on the promise, i.e., they relied on the City’s long-standing commitment to that comprehensive supplemental coverage, and losing it would cause them harm. The Court ruled that injury had been demonstrated in the affidavits, and opting out altogether would cause financial strain, since the City had no intention of reimbursing the Part B premiums. The retirees were therefore entitled to relief, but the Admin Code had not, in fact, been violated, since the City has never actually covered “the entire cost” of healthcare for Medicare retirees in the first place (i.e., Medicare picks up some of the costs), and no one is disputing that.  It permanently enjoined the City from eliminating the existing health insurance and enrolling retirees in the new Aetna PPO, it couldn’t enforce the June 30, 2023 deadline to opt out of the new plan, or implement any other aspect of the City’s new healthcare policy.

#3.  Copays (“Bianculli”).     Dec 2021 the City put in $15 copays for outpatient benefits in Sr Care, to begin Jan 1, 2022. Retirees filed suit claiming that that was unlawful. They’re litigating it but the trial court granted an injunction. Retirees won the appeal on that, so now there’s a hold on those copays. But Emblem changed the documents. Copays will start Jan 2025.

Google results:

A class action lawsuit was filed on Nov 29, 2022 by lawyers Cohen and Gardener on behalf of retirees against the City for breach of contract. The “class” of the action were the 183,000 retirees and Medicare-eligible dependents in Senior Care in 2021. The retirees had claimed that the City illegally charged them a $15 copay for every outpatient procedure or test, though the contract didn’t permit the imposition of copays on Medicare-eligible retirees. More than $55 million of the cost of copays had been illegally charged to date. The retirees also charged that the City has been unjustly enriched by those copays through a “bait-and-switch” operation: there weren’t any copays when retirees chose that plan in the fall of 2020, and because they were not allowed to make changes to that choice in the fall of 2021, they had to live with that plan in 2022 even though copays had been illegally attached at the beginning of that year. No restitution was made to the retirees who paid those copays. 

The retirees also claimed that Emblem/GHI misrepresented the copay situation and the whole Sr Care plan itself, knowingly conveying these “misrepresentations” directly and indirectly to the retirees.  The City had a duty, the retirees claimed, to describe Sr Care accurately. That didn’t happen. The City had “engaged in consumer-oriented conduct that has misled and harmed Retirees” and used “false advertising” about the nature and coverage of the plan. The City’s ongoing imposition of copays were “arbitrary and capricious and clear abuses of discretion.”

Some more granular statements are interesting.  One of the claims in that lawsuit says: “In short, payments to medical providers are paid by GHI either out of a City account controlled by GHI, or out of GHI’s coffers and then charged back to the City in the form of a premium. Regardless of whose account is used to pay the medical provider – the City’s or GHI’s – Defendants, not Retirees, are contractually obligated to pay.”  They say that if a $15 copay is imposed, it should be paid the the City, not the retirees.

Some fascinating details regarding the nature of the GHI retiree plan and the plan for in-service members are given on pp. 15-16 of this document, particularly that both plans are addressed in the same Certificate of Insurance (COI), that the COI specifically says that this certificate is not a “Medicare Supplement Plan,” that benefits for retirees and in-service are very different from each other, that there is no publicly available guide for Medicare enrollees into this plan, and that the benefits for retirees (now on Medicare) are specified in section 14 of the COI. Additionally, nowhere in the 2004 rider does it say that retirees must pay a copay. In sum, whereas copays have been allowed in the plans for in-service members, they have never been used for retirees (who have Medicare as the primary payer). 

Interestingly, the lawyers made the point (on p.22) that “had GHI/Emblem increased the Sr Care premium charged to the City – to properly account for the tens of millions of dollars in healthcare costs improperly imposed on retirees in the form of co-pays – the resulting premium would continue to be far below the HIP HMO statutory cap, which the City is required to pay.” 

Also of note: it says (on p.25) that the 2022 brochure explaining the health plan made no mention of copays, except for ER and an optional drug component outside of GHI. Apparently for a few weeks around Dec 2021, the online version of this document did mention copays. 

In an unpublished opinion, the Supreme Court enjoined the City from charging copays on Jan 11, 2023, since there’d be irreparable harm to retirees on fixed incomes with modest means, outweighing the “the steps that [the City] would have to take to undo the apparent imposition of the co-payments.”  The Court also said that copays would likely be found as violating the contract between NYC and Emblem. A preliminary injunction against copays was granted. 

A published opinion on May 25, 2023 kept that January preliminary injunction in place. It agreed that “plaintiffs established a likelihood of success on the merits,” and since the City hadn’t made any arguments against class certification, it was reasonable to conclude that the named retirees were representative of the class. Furthermore, the hardship to plaintiff retirees were more burdensome than any administrative hardships the City claimed they’d be subjected to.

An unpublished opinion issued by the Supreme Court on May 25, 2023 reviewed the requirements for class certification and listed additional factors in determining whether the action should proceed as a class action. It cited the City’s argument against class certification, namely that there are other methods to adjudicate these claims, which the retirees refuted. The Court found the City’s argument “unavailing.” Class certification is indeed appropriate, that “the commonality of factual and legal allegations is abundantly clear,” and “as a class action, judicial economy would occur.”  It ordered the plaintiffs’ motion for class certification was granted.

#4. Copays again.   Gardener said this is a fourth suit, but it’s not filed yet. 

Words, words, words . . .

I’m reacting today to Arthur’s post “Unity Has a New Health Care Narrative,” where there is some talk of the new $15 copay for each benefit in Senior Care and the out-of-pocket maxes.

I’ve been saying for years that muddled terminology gets you into muddled thinking, and I’m pretty sure that the lack of clarity in the ongoing health care negotiations isn’t going to produce the best results. 

It started a couple of years ago when hundreds of our colleagues were shouting all over the place that they didn’t want to “lose their Medicare.”  I was told they needed that kind of rhetoric to gin up rank-and-file support against the Aetna PPO we were being pushed into. Those protesters certainly got the job done, and I love that, but I think their health care concepts are not yet firmly in place. If they’re going to negotiate for us, I want them to spot on with that. 

Trying now AGAIN to clarify some things about Senior Care. 

It has always been a hybrid plan – the result of negotiations between the unions and NYC. It’s never been a straight “Medigap,” the kind you get in the open market.  Those true Medigaps are designed by the feds and managed by the states. The screenshot below shows how each of those 10 plans supplement Medicare (it’s from Medicare & You 2025, p.76).

Here’s the differences between our Senior Care and those Medigaps and why it’s a hybrid:

• First.  The most comprehensive of the 10 true Medigap designs – F, G, and their high-deductible versions – do not have copays. The popular N plan does have one, but only for two things: a doctor visit (up to $20, it can be waived altogether) and a $50 copay for the emergency room if you’re not formally admitted. The less popular B, C and D plans don’t have doctor or ER copays either. For all of these, there aren’t any copays at all for therapists, lab tests, and x-rays. The union negotiated a $15 Senior Care copay for every little thing, but for now they’re stopped by the Court. Supposedly they’re coming back January 1. 

Weird note:  I just signed into my plan at EmblemHealth. It says we have a $15 copy for specialist visit, $15 for each allergy visit, $50 for hospital emergency room, and various copays or percentages for other services. I’m not sure that screen is accurate. My card says specifically says no copays for doctor visits, so why is the website saying there’s one for a specialist? Who knows.

• Another difference.  Plans F and C pay Medicare’s Part B deductible ($2,096 this year). The other designs don’t pick that up, and neither does Senior Care. But the City reimburses us for it, and for any IRMAA surcharges, as long as we get a pension and take one of its health care plans. That’s a real blessing, but negotiations led to Senior Care’s own $50 annual deductible. True Medigaps don’t have this feature at all.

• Still another difference.  Senior Care handles inpatient hospitalization differently from true Medigaps. The F, G, and N all pay Medicare’s Part A deductible $1,632 per admission, and so do the less popular B, C and D plans. But, Senior Care does not pay that whole thing. We still have a $300 deductible per benefit period, to a max of $750 a year. That kind of limited deductible each benefit period in lieu of Original Medicare’s $1,632 deductible is exactly the kind of arrangement Medicare Advantage plans generally have.

As I’ve been saying, these things are what the unions and City negotiated for us. Senior Care is not a strict Medigap, but a hybrid mix, borrowing some characteristics from true supplements, and some from Advantage plans. 

In fact, look at our Anthem card and you’ll see at the bottom where it’s called a “PPO.” Then sign into your Medicare.gov account, and you’ll see that Medicare itself calls it a “PPO.” These are mine: card on left, Medicare.gov screenshot on the right:

“PPO” is the term most associated with Medicare Advantage plans, the two most common of which being the HMOs (Health Maintenance Organizations) and the PPOs (Preferred Provider Organizations). 

We have Original Medicare Parts A and B (through Social Security), yes, and supplemental insurance through Senior Care for the remaining costs, but not in the same way as open-market supplemental plans.  Our Senior Care supplemental coverage is through this hybrid kind of PPO plan. The other plans offered by the City are also kinds of “supplemental” coverage. 

Regarding the drug component. People without employer/union retiree coverage need to have drug coverage if they don’t want a penalty.  They either get a stand-alone Prescription Drug Plan (PDP) or an Advantage plan that includes drugs. Vets can get drugs through the VA.

We get the drug coverage through a “rider,” which is $120 a month if we have Senior Care and $178 a month if we have the HIP VIP HMO. They’re negotiated with the pharmacy benefit manager, Express Scripts. This is certainly drug coverage, but not a normal stand-alone Part D plan like the ones in the open market.  In fact, our coverage has an “open” formulary, which usually allows access to many more drugs than “closed” formulary coverage. How much the union has been involved with the creation of that formulary I have no idea. I just know those rider premiums are steep, I’m not crazy about them.

I’ve been accused of “using the insurance talking points,” but I would love it if people started using industry terminology. What I’m asking for is clarity – in our negotiations, in our responses to Mulgrew et al., and when we take to the streets to get the best retiree health care deal in this absolutely scandalous for-profit industry.