A proposed New York City policy may soon jeopardize the health insurance for its 245,000 retirees. The city plans to reduce cost by moving its retirees and their dependents from their traditional Medicare insurance to a less expensive private Medicare Advantage plan. The Mayor’s Office of Labor Relations is currently pressing the local coalition of municipal workers’ unions to accept this change.
To provide an illusion of choice, the insurance industry promotes Medicare Advantage plans with offers of free gym memberships and well care home visits. In truth, corporate profit - not patient care - is the primary goal. A recent Physicians for a National Health Program position paper states that these plans “avoid paying for expensive services by denying recommended care, limiting networks to less costly providers, and forcing patients to go out of network to obtain care” (www.pnhpnymetro.org).
The term advantage implies - falsely - that Medicare Advantage plans offer an upgrade in health care service from the traditional Medicare program. Medicare Advantage plan profits have soared during the pandemic. The numbers of elective surgery procedures, those procedures that are often costly to insurance providers, have fallen during the pandemic. Insurance claims have thus decreased while premiums have remained constant. The result? Increased profit.
A recent Kaiser Family Foundation report (December 16, 2020) shows that the gross profit margins of Medicare Advantage plans have increased from $148 (margin per member per month) in 2019 to $200 in 2020. This while millions of Americans have lost their health insurance in 2020 along with their jobs. Many Americans faced with COVID-related medical bills have become bankrupt. Medicare Advantage plans continue to profit by recruiting younger healthier members while at the same time dumping older members to traditional Medicare when they become ill. Medicare Advantage plans pay physicians poorly. Many physicians do not accept Medicare Advantage patients. And for the patients there are copayments and hidden costs.
Mrs. KL, a 72-year-old rheumatoid arthritis patient from Mentor, Ohio, has recently experienced the pitfalls of a Medicare Advantage insurance policy. Aided for years by monthly steroid injections, she has continued to work freelance in her retirement as a seamstress. Thanks to her injections, she maintains good finger mobility and freedom from joint pain. Her monthly out of pocket cost? $30. The Kaiser Health News (April 16, 2021) reports however that Mrs. KL’s retirement plan has recently changed from Medicare to a United Healthcare AARP Medicare Advantage plan. After this change, Mrs. KL for the first time received along with her regular injection a bill for an added clinic and pharmacy charge. The total bill for the injection? $1262. Given that her income is supplemented by Social Security, she must now choose: injections she can no longer afford or ceasing to work. If our city successfully transitions its retirees from traditional Medicare to a Medicare Advantage plan, many city retirees will suffer Mrs. KL’s fate.
Saving money should not occur at the expense of our retirees’ health. The City should instead support the passage of the bill “New York Health.” This bill would both save money and improve health care delivery. Here in New York State momentum for the passage of legislation for a single payer health care system is growing. Our bill entitled “New York Health” (S. 5474; A. 6058) has long enjoyed a supermajority in the State Assembly. It now has a majority in the State Senate (33 - 30) as well. The bill establishes a New York Trust fund to serve as a bank. Health care funds derived from progressive taxes plus monies due to our state from Medicare, Medicaid and CHIP will all be deposited into that fund. Medical expenses will then be paid from that fund. Just like Medicare. Every New Yorker pays his yearly assessment. Nothing more. Nothing at the time of any interaction with a physician or hospital facility. No deductibles, copays, doughnut holes or hidden charges. This universal system uncouples health insurance from employment. Had such a system been in place earlier in 2020, persons losing their jobs would not have lost their health insurance as well.
A recent Rand Corporation study shows that economic projections made from the bill are reasonable and should be acceptable to both patients and physicians. All other industrialized Western nations have universal health care systems in some form. All enjoy better overall health and at a lower cost. We should push the City to support this bill. Meanwhile, we should reach out to the City Council to block this proposed transfer of our health insurance program to a Medicare Advantage plan.
Marc H Lavietes, MD is Secretary of Physicians for a National Health Program, NY Metro chapter.