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No Sale: NYC Union Leaders Reject Aetna’s Rosy Take on Medicare Advantage Prior Authorizations & Denials

The heads of New York City’s Municipal Labor Committee [MLC] may be driving the campaign to strip municipal retirees of their traditional Medicare coverage — but not everyone in the ranks of the MLC is happy about it.

By Joe Maniscalco

Aetna is one the largest private health insurance companies in the United States today, in the top 10, in fact. And this week, we learned the company is alleging to have handled 82 million Medicare Advantage claims last year alone — and out of that vast number, they say, “only” 3.4% were subjected to prior approval, with a mere 0.49% ultimately being denied. 

That’s only 2,788,000 sick and elderly people forced to jump through bureaucratic hoops to get the care they need — and only 401,800 others who where told they were s—t outta luck.

This is all according to a petition Aetna submitted this week to New York State Supreme Court in an effort to convince Judge Lyle E. Frank to allow Mayor Eric Adams and the heads of the Municipal Labor Committee [MLC] to strip New York City municipal retirees of their traditional Medicare coverage and push them into a profit driven private health insurance program run by Aetna starting September 1.

According to Aetna these figures are…a selling point?

“My question to Aetna,” Kyle Simmons, president of New York City Laborers Local 924 told Work-Bites this week, “would be why would you think 3.4% — or 2,788,000 million prior approvals — would be acceptable for an aging population? Mostly because they are elderly [and it] now becomes a quality of life issue, and because of their age, time is a very important factor?”

Simmons’ members work in municipal buildings and facilities located throughout the city — everything from colleges, universities, and hospitals to firehouses, police stations, sanitation garages, and a host of others. The union is part of District Council 37, and also a member of the MLC.

Unlike the heads of the MLC, however, Simmons vehemently opposes privatizing the decades-old promise New York City made to municipal retirees when they originally signed onto the job — to cover the 20% gap in healthcare costs that was always baked into traditional Medicare coverage.

And he’s got a lot more questions about the Aetna contract. 

“I would [also] like to know what was the shortest, average, and the longest waiting time period for approval,” Simmons says. “Now, when you look at .49% or 400,000 elderly refusals — how many of those became a permanent quality-of-life issue? And how many retirees, unfortunately, didn’t make it because of the refusal?”

Work-Bites has been consistent throughout the city’s relentless drive to privatize retiree healthcare — citing multiple cases, studies and reports clearly documenting Medicare Advantage’s dismal track record all across the country.

Municipal retirees have spent more than two years rallying in the streets against the roll out and continually beating the city in court.

“How many times are they [NYC] going to try to do this before they just say, you know what, let's just forget it — let’s just stick with what we've been giving our retirees,” Correction Captains’ Association [CAA] President Patrick Ferraiuolo told Work-Bites this week.

The CAA is also a member of the MLC, but Ferraiuolo is so fed up with the autocratic nature of the group and the way its leadership — UFT President Michael Mulgrew, DC 37 Executive Director Henry Garrido and Uniformed Sanitationmen’s Association President Harry Nespoli — have orchestrated the drive towards privatizing retiree healthcare — that he’s contemplating pulling out of the organization all together. 

“All I would lose is my one measly vote,” Ferraiuolo says. “Honestly speaking, I don't believe it when they say that they can’t continue to afford to pay the Medicare Part B, or whatever Medicare you're on as a retired city employee, the way they've been paying it all along. I just don't see it — the city rakes in a lot of money.”

While conceding it subjected nearly 3 million people to prior authorizations and outright denied the claims of 400,000 last year alone — Aetna claims the Medicare Advantage plan it has for New York City will somehow experience fewer denials.

Simmons isn’t buying that one either.

“What is the difference between a New York retiree and any other retiree in the United States,” he says. “My questions to OLR [Office of Labor Relations], MLC and Aetna — what happens when the contract is over?

The Medicare Advantage contact Mayor Adams signed with Aetna back on March 30, — and this week deemed "registered” over the wishes of New York City Comptroller Brad Lander — runs for five years.

“Let’s say agreements can no longer be made for whatever reason and the separation occurs — now what?” Simmons says. “Can we go back to the old plan with ease, or are retirees and future retirees hurt for life?”

Simmons recalls late ChrysIer CEO Lee Iacocca famously saying, ‘I guarantee this car for 7 years or 70,000 miles. If you find a better car — buy it.’

“Well,” Simmons says, “If you believe in your product — guarantee it!”

Incredibly, Aetna is also reportedly claiming that as of June 6, only 979 New York City municipal retirees and dependents had opted out of the company’s profit-driven Medicare Advantage plan — with company exec Rick Frommeyer crowing, “despite the noise about Medicare Advantage plans, retirees overwhelmingly like what they see in our plan.”

In reality, however, the New York City Organization of Public Service Retirees — which is awaiting the introduction of proposed legislation in the New York City Council next week designed to preserve traditional Medicare — has, itself, long been urging retirees to sit tight and wait for things to play out legislatively and in the courts before making the jump. 

Ferraiuolo adds, “Can [retirees] afford to opt out and then pay a couple of hundred dollars a month to continue with their original plan…and then not even know what the future is with their original plan?”

Municipal retirees will hold a noontime rally outside City Hall at Broadway and Park Place in support of the proposed legislation protecting traditional Medicare on Thursday, June 22. Council Member Charles Barron is expected to introduce the proposed legislation. Council Members Lynn Schulman and Inna Vernikov are co-sponsors.

The comptroller wrapped up his mandated review of the Aetna contract last week  by refusing to register it, citing the “privatization of Medicare plans, overbilling by insurance companies and barriers to care under Medicare Advantage plans.”

The city’s fiscal watchdog also expressed concerns about the existential threat increasing privatization poses to traditional Medicare across the country.

He also voiced his doubts to retirees that the city will save the supposed $600 million the Mayor’s Office says it will by privatizing municipal healthcare.

Despite all this, Mayor Adams has now chosen to completely overrule the comptroller’s views and has gone ahead and “deemed” the city’s Medicare Advantage contact with Aetna officially registered and ready to roll out — much in the same way former Mayor Bill de Blasio frequently overruled the comptroller’s office during his celebrated administration. 

Mayor Adams had previously denounced and derided the idea of pushing municipal retirees into a profit driven Medicare Advantage while on the campaign trail.

“The Mayor said, ‘You can’t balance the budget on the backs of those who served the City.’ Unfortunately, that is what he has decided to do,’ Marianne Pizzitola, president of the New York City Organization of Public Service Retirees President said in statement issued after Mayor Adams “deemed” the Aetna contract registered. “We were lied to when we entered into a contract serving this city, and when Eric Adams was a candidate, he called it the ultimate ‘bait and switch.’ Today, he is at the helm of that switch.”