A surgical intervention: Council can pass narrow law to save Medicare Advantage rollout

In the aftermath of Mayor Adams’ second court defeat over the rollout of a cost-saving Medicare Advantage health insurance plan for city retirees — this one more definitive, before an appeals bench — it appears that the city’s lawyers are wasting time arguing against the relatively clear language of the law.

That is Local Law 12-126, which states that the city covers the full cost of health insurance for employees and retirees. Citing it, the appellate panel unanimously affirmed a lower court striking down the city’s attempt to charge retirees a $192 monthly fee to opt out of the new health plan and stick with their existing traditional Medicare coverage. Without the ability to assess that amount, the $600 million in annual cost savings predicted from the switch won’t materialize.

The law should change; New York City is tying its hands while retiree health-care costs eat up an ever larger portion of the budget, adding up to $122 billion in current liabilities. Unfortunately, it seems like the City Council is lukewarm at best about touching 12-126, fearful of incurring the wrath of motivated retiree voters.

The NYC Organization of Public Service Retirees and others opposing the new plan have two broad concerns: that the Advantage plan will be inferior coverage to their existing plan, and changing the law would be a slippery slope to the city totally backing away from funding benefits.

On the former point, the retirees appear to have some ground to stand on in the wake of a federal Health and Human Services inspector general report showing that some Advantage plans deny medically necessary care at higher rates. The good news is that this is a failure of oversight and enforcement, not of plan design. The city should offer binding assurances that it will use its institutional weight to keep private providers in line.

On the latter, the Council doesn’t have to go whole hog and gut 12-126. They can pass a tailored measure that leaves room for the city to make tweaks while still offering comprehensive insurance. Or would that just make too much sense?