New York City is needlessly losing $50 million a month meeting its obligation to cover retired municipal workers’ health-care costs; most unions are on board with a plan that would save that cash while giving each retiree options. But because the City Council refuses to allow it, City Hall has no choice but to unilaterally enroll all retirees in a single free Medicare Advantage plan.
The mayor’s people sent Speaker Adrienne Adams and her council colleagues an ultimatum before the election: Either amend the administrative code to permit the many-choices plan agreed to by the Municipal Labor Council and then-Mayor Bill de Blasio, or the no-options plan kicks in soon.
Kudos to Mayor Eric Adams for recognizing that fiscal belt-tightening is needed as the city’s tax base has been decimated by the pandemic, an economy in recession and an exodus of residents. The city’s retiree health-insurance costs grew an annual average of 5.5% from FY 2014 to FY 2022; the city’s long-term liability for these costs is over $122 billion. Something must give.
The deal should’ve been done last year, but Team de Blasio botched the rollout and angered a small group of vocal dissidents, whom the council plainly fears to cross. So the active plan is to enroll 250,000 eligible retirees in a high-quality Medicare Advantage plan, saving the city $600 million a year.
But “plan A” would have let the city charge $190 a month to retirees who’d rather keep their current city-funded SeniorCare Plus plan, as well as give them more options on various other plans.
Local governments across the country are doing this. New Jersey, for one, acted in January 2019 and has saved hundreds of millions.
It’s going to happen; the only question is whether the council will face down the hotheads to benefit the majority of retirees.